Chinese Bitcoin Exchange Inspections Cause Price Drop and FUD
News from China is once again spreading through the bitcoin world like wildfire. It appears China’s central bank the People’s Bank of China (PBOC) is visiting with the top three Chinese exchanges and assessing each companies operations. Per usual on negative rumors from China the price of bitcoin took a dive during the early hours […]
News from China is once again spreading through the bitcoin world like wildfire. It appears China’s central bank the People’s Bank of China (PBOC) is visiting with the top three Chinese exchanges and assessing each companies operations. Per usual on negative rumors from China the price of bitcoin took a dive during the early hours of January 11 dropping another 15 percent to a low of US$790.
Meetings with the PBOC and Chinese Bitcoin Exchange Causes More Speculation
China’s central bank is currently monitoring and assessing the Chinese exchanges Huobi, Okcoin, and BTCC according to a press release from the institution. The news follows last week’s announcement that these regulatory assessments would be taking place. Reuters details the bank is looking into capital flight and anti-money laundering practices amongst other discussions like “market manipulation.”
“The People’s Bank of China Shanghai headquarters, the Shanghai Municipal Finance Office and other units to form a joint inspection team on Bitcoin China are carrying out on-site inspections,” explains the PBOC press release. “Focusing on checking whether the scope of the enterprise beyond the scope of the market, operation, whether or not without a license to carry out credit, payment, exchange and other related business; whether there is market manipulation; anti-money laundering system implementation; financial security risks and so on.”
As soon as the news hit the ears of the cryptocurrency community the price of bitcoin starting dropping after reaching a high of $925 late in the evening January 10. Furthermore, news outlets covering the subject were quick on the draw to release stories concerning the Chinese inspections. News reports from Reuters, Yahoo Finance, the Globe & Mail, Zerohedge and many others gave details about the situation. Additionally, many cryptocurrency-centric publications also spun off stories with some of them being a bit misleading.
God. It’s not a raid. Stop spreading FUD. https://t.co/rgchXsFL0b
— Samson Mow (@Excellion) January 11, 2017
BTCC Says Community Should Approach the News With a Rational and Cautious View
According to the press releases originating from Shanghai and Beijing, the inspection is merely a typical regulatory oversight. The bitcoin exchange BTCC has been the most vocal about the situation once again reaffirming the meetings were nothing to worry about. The Chinese exchange details the cryptocurrency community should use rational thinking rather than depend on speculative news sources. BTCC states via the company’s Twitter handle:
A group of regulators consisting of the SH branch of PBOC, the SH Financial Affairs office & other related govt agencies visited BTCC. During this visit, we followed up on prior discussions and shared details about our business model and operations with the group. We expect to continue with additional meetings later this week. All operations at BTCC are normal and we continue to actively work with regulators to ensure that we remain compliant. In the meantime, we urge our customers to take a rational and cautious view to news articles which speculate on the visit and discussions.
Just Another Day in Bitcoin-Land
Time and time again fear, uncertainty, and doubt has shaken up some within the bitcoin crowd. Many are leaning towards the speculation that the Chinese government is trying to curb capital flight and tighten the offshore yuan market. The price of bitcoin has sunk to new lows but is slowly rebounding in an upward trend back to $815 at press time. There has been a lot of shorting within the trading community, and many members of the Whale Club expected the bearish decline.
The news from China and rumors from the region is nothing new within the bitcoin community as these events have happened regularly since the cryptocurrency’s beginnings. Speculation and the game of telephone is a common occurrence for bitcoiners and is only human nature. The bottom line is the ‘Honeybadger of Money’ just doesn’t care and it’s just another day in bitcoin-land.
What do you think about the announcement from the PBOC and BTCC’s follow up responses? Do you think Chinese news has caused the price to drop? Let us know in the comments below.
Images via Shutterstock, and Bitcoin.com.
What’s the quickest way to see the current bitcoin price in your local currency? Click here for an instant quote.