Cryptocurrencies Take A Big Hit After China Ends Exchange Trading
Bitcoin dropped about 40% this month.
Bitcoin (BTC) and other cryptocurrencies took a huge hit this week after the Chinese government decided to end its sale on exchanges at the end of the month. BTC was at an all-time high of nearly $5,000 at the beginning of September and dropped down to a four-week low near $2,900 Friday morning. Since then, the volatile currency has seen a sharp rise to back around $3,600.
China’s decision to end the sale of cryptocurrencies in exchanges marks the biggest crackdown by the communist country to reign in their growth. Two weeks ago, the country’s regulators banned fundraising through initial coin offerings, but regulators have yet to stop over-the-counter transactions. China has given no reason for its actions, but according to Bloomberg, it’s believed the country is attempting to mitigate financial risk before its once-every-five-years reshuffle of leadership in its Communist Party.
Photo by Marc van der Chijs/Flickr.
Although the price has dropped dramatically, some see it as an opportunity to take advantage. “This all because of China. Chinese investors have until September 30th to get their money out of exchanges before they close,” Brian Kelly, CEO and founder of BKCM told CNBC. “This is a market structure drop and not a drop on fundamentals, therefore this is a buying opportunity.” Recent comments by Jamie Dimon, CEO of JPMorgan Chase, however, have some investors scared of cryptos. “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” Dimon said at a banking conference. “Currencies have legal support. It will blow up.”