Having hit record highs just weeks ago, bitcoin’s boom has since abated as the currency feels the heat from heightened regulatory attention. On September 14, BTCC, one of China’s biggest exchanges, announced that it is halting trade in response to a notice from Chinese regulators.
China’s National Internet Finance Association recently issued a warning regarding the role of cryptocurrencies in facilitating illegal fundraising and money laundering. BTCC said that its decision to stop trading came after “carefully considering” the warning.
According to Reuters, the regulator is preparing to double down on exchanges. Sources told the Chinese financial news outlet Yicai that the government plans to completely ban bitcoin exchanges by the end of the month.
Chinese bitcoin markets account for approximately 98 percent of total bitcoin trading volume worldwide
The stance of Chinese authorities could be pivotal for bitcoin’s future. Many estimates indicate that the vast majority of trade occurs through exchanges in the country. According to publically available data, approximately 95 percent of global exchanges from traditional fiat currency into bitcoin are from purchases in the Chinese renminbi.
What’s more, Chinese bitcoin markets account for approximately 98 percent of total bitcoin trading volume worldwide.
This said, due to difficulties in interpreting and accessing the full range of relevant data, it’s hard to pinpoint quite how dominant China is in the global market. An analysis published by CoinDesk placed the Chinese market share at around 85 percent. Others place it closer to 50 percent.
Even going by lower estimates, China’s regulatory decisions on the currency can be expected to cause substantial ripple effects that will be felt across global cryptocurrency markets.