China Bitcoin Ban by the government, ForexSQ financial experts say the China financial services authorities banned Bitcoin trading in China.
China Bitcoin Ban
[sam id=”8″ codes=”true”]
China’s financial services authorities required major executives of the Shanghai-based bitcoin trading platform BTCC on Friday to rectify misbehavior in the trading of the virtual currency – and to raise awareness of risks as the value of bitcoins experienced wild fluctuations.
The value of each bitcoin jumped more than 14 percent on Friday, after hitting an all time high of $1,180 on Thursday. The currency’s value fluctuated by more than 30 percent within the past two weeks.
A statement of the People’s Bank of China Shanghai Head Office released on Friday called the changes in the virtual currency “abnormal”, and said authorities have required the trading platform to operate in compliance. They urged the platform to probe investors’ behavior and to rectify misbehavior.
The statement said authorities would like to reaffirm that the bitcoin as a virtual currency which cannot and shall not be regarded as currency in circulation.
Investors flocked to the bitcoin market in recent days in a bid to gain from its fast appreciation, which rose 200 percent in 2016, while analysts warned that wild fluctuations of the virtual currency’s price and the lack of transparency of its flows may bring risks.
More investors have joined the bitcoin trading market in recent months in a bid to gain profits from its price appreciation. According to data of Shanghai-based BTCC, a bitcoin trading platform, more than 100 new investors started trading the virtual currency in the past three days, a fast growth compared to some 20 new investors before October in 2016.
The bitcoin model limits the currency to a total of 21 million units, of which 16 million have already come into existence. The method to create new bitcoins involves complicated computer processes. This has become increasingly difficult and on average no more than 7,000 new bitcoins are supplied to the market per year.
“This trend shows that the bitcoin market’s appeal has been rising to a new level,” said a market review by BTCC dated Jan 4.
Feng Xin’an, 43-year-old sales manager with Shanghai-based Maoxin Trade Ltd, said he invested some 135,000 yuan ($19,515) in the bitcoin market as he regards bitcoin as a “haven asset”.
“The young generation, like my son and his friends, love to pay with digital currencies. Their demand for bitcoin can grow further, as I observe,” he said.
Analysts warned that bitcoin is not a tool that “guarantees” yield – and especially for new investors who have limited knowledge about the history of the virtual currency’s prices and understanding of the its nature, entering the market blindly could be risky.
“Investors should always remember that bitcoin lost more than 75 percent of its value in 2013. We do not recommend it as a long-term investment tool, particularly because of compliance concerns,” said Zhang Yufang, investment adviser with Shanghai Shangding Investment Consultancy.