Rumors and speculation that the People’s Bank of China (PBoC) is preparing to outlaw bitcoin exchanges grew more serious on Wednesday, as a self-regulatory agency established by the bank issued a statement warning their members not to operate cryptocurrency exchanges or utilize their trading platforms.
The National Internet Finance Association of China (NIFA) claimed that bitcoin exchanges do not have a “legal basis” in the country and derided them as a tool for money launderers and other criminals. From a rough translation of the statement:
NIFA released a similar statement criticizing initial coin offerings (ICOs) shortly before the PBoC banned Chinese citizens and residents from creating or participating in token sales, so this quasi-official warning added to the growing list of rumors and hearsay that suggest a bitcoin exchange ban is imminent.
Market Slump Reaches $30 Billion
Every new addition to the rumor mill has caused the markets to contract, and they never quite recover before a new report sends them careening downwards again. On Wednesday, this downwards movement dropped the bitcoin price below $3,800 for the first time since August 22. This represents a 7-day decline of more than $700; for reference, the bitcoin price was $610 this time last year.
Bitcoin Price Chart from CoinMarketCap
The ethereum price has fared equally as poorly. A week ago, it was trading at $330–having already declined $60 on the heels of China’s ICO ban. Since then, it has dropped well below the $300 threshold. Wednesday afternoon, it fell as far as $261; this put the ethereum price at its lowest point since August 7.
Ethereum Price Chart from CoinMarketCap
The retreat extended throughout the altcoin markets. Monero is the only top 10 cryptocurrency that has not posted a double-digit decline during the past 7 days, but it’s 9.3% slide is far from impressive.
Chart from CoinMarketCap
This comprehensive pullback has reduced the total cryptocurrency market cap to $131.1 billion. Altogether, the total value of all cryptocurrencies has fallen 21%–constituting more than $30 billion–since Friday, when it reached its weekly peak of $165.3 billion.