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China central bank brags about killing Bitcoin trading in the country

Published Jul 9th, 2018 8:05PM EDT
Bitcoin Price Today
Image: Ben Cawthra/REX/Shutterstock

Bitcoin had a fantastic run last year, but the fun only lasted until January 2018 when a variety of factors contributed to Bitcoin’s massive fall. Fears of regulation in multiple markets were often cited as the main reason for Bitcoin’s fall from grace with consumers. China was one of the most important markets to impose strict rules related to Bitcoin and cryptocurrencies, including a ban on trading the most popular coin in the world. It now looks like China may have helped decimate Bitcoin, and the country seems pretty happy with itself.

We’re now in early July and Bitcoin is recovering after having reached new lows just a few weeks ago. Regulation worries and hacks on exchanges aren’t the only explanations for the continued downturn for crypto coins. Market manipulation has emerged as a potential reason for Bitcoin’s highs and lows, although it’ll take some time for those allegations to be sufficiently proven.

Amid all that, Chinese-language issued a report on Saturday relaying new data from China’s central bank regarding crypto action in the country. Bitcoin trading in Chinese fiat (renminbi or RMB) has fallen to less than 1% of the world’s total, down from a peak of more than 90%, according to the bank.

China banned initial coin offerings (ICOs) last September as well as direct trading between RMB and virtual currency. The bank says that the country has ensured a “zero-risk exit” for 88 exchanges and 85 ICOs. While some exchanges and ICOs have been able to relocate to crypto-friendly countries and continue their business, not being able to trade fiat for crypto has been a massive blow to most Chinese traders. Local mining endeavors were also hurt in the process.

Bitcoin price continued to climb in September 2017 in spite of bad news from China, going to almost $20,000 in late December. But the bank’s report suggests that China’s bans on crypto may have had a longer lasting effect than initially believed. In less than a year, China managed to significantly reduce Bitcoin trading in the country and around the world, which must have had an impact on the entire crypto market.

At the time of this writing, Bitcoin was trading at around $6,800, well above the new lows. But that means nothing in the crypto market where massive price swings can occur anytime without any notice.

Image source: CoinMarketCap

Chris Smith Senior Writer

Chris Smith has been covering consumer electronics ever since the iPhone revolutionized the industry in 2008. When he’s not writing about the most recent tech news for BGR, he brings his entertainment expertise to Marvel’s Cinematic Universe and other blockbuster franchises.

Outside of work, you’ll catch him streaming almost every new movie and TV show release as soon as it's available.