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China: Bitcoin Banks, Mines, Myths and Realities

Western curiosity about Bitcoin in China remains high, but access to information is usually quite limited.

As a consequence, there are a few tropes about Chinese Bitcoin activity that tend to pop up in every conversation. There are huge factory-like mining farms in the countryside. The government discourages Bitcoin use, limiting its utility to anyone other than gamblers and speculators. Chinese people are using Bitcoin to get their money out of the country.

Some of the preconceptions are misguided – the government has never prohibited Bitcoin, and cryptocurrency trades represented only a minuscule portion of the $676 billion that left China last year.

Others are more accurate – those massive mining operations do exist in rural areas where electricity is cheap, and exchanges are big businesses that aim to attract traders with a love for double-figure leverage.

A Bitcoin Bank Account Instead?

For this reason, Chinese startup HaoBTC‘s site stands out as trying to offer something more original. For starters, the company’s minimalist interface looks more bank-like than a casino, and it offers interest payments on BTC deposits.

Apart from its primary function as a bitcoin wallet, there’s also a “finance” option for longer-term interest-bearing deposits, a multi-sig vault storage service, a simple brokerage and direct linking to fiat accounts at 11 Chinese banks.

HaoBTC does also operate, however, a large-scale Bitcoin mine of its own – which is how it pays the aforementioned interest. The company invests its customer deposits in the mine, which sits next to a hydro-electric plant atop a dam.

While other Bitcoin exchanges in China and elsewhere sometimes offer interest, the money usually comes from loaning the bitcoins to margin traders. HaoBTC says in its FAQ that over 400 BTC in interest has been paid – at 3% p.a. to ordinary wallets and 12-15.58% to “finance” accounts.

HaoBTC has a full English interface, though only China residents can link bank accounts for fiat deposits and withdrawals. Customers without Chinese bank accounts are limited to bitcoin-only services, though they can still earn interest.

Customers Don’t Always Know What They Want

When it first opened, HaoBTC offered a standard on-chain bitcoin wallet called “OpenBlock,” but soon shut it down after business failed to take off.

Chief Marketing Officer Eric Mu explained to Bitcoin.com the reasons, and the company’s rationale for pivoting to something more bank account-like and familiar:

“After the first idea failed to take off, we reflected on what went wrong – the conclusion is that we should focus more on what people really want instead of what they say they do.”

What most Bitcoiners always say they want, Mu added, is full control of their coins with on-chain wallets and retention of their own private keys. In fact, though, many see Bitcoin as an investment, like startup shares, and are willing to take certain risks if there’s a reward.

So by design, HaoBTC does function more like a bank, putting its customers’ money into an investment that (hopefully) keeps growing in value. It also aims for more transparency than other Chinese Bitcoin companies have had in the past, explaining the nature of Bitcoin mining, and the risks of investing and speculating on Bitcoin price.

Mining-Based Interest and Fractional-Reserves

HaoBTC deriving its interest payments from a Bitcoin mining operation could raise some eyebrows, but in reality the Bitcoin economy does not present the wide range of investment choices that traditional financial services have.

“It is not hard to understand that the larger you are, the more ways you have in terms of cost cut – those who can afford advance payment get discount when buying hardware; they also get cheaper electricity because they hold more leverage on negotiation table. So we as miners are incentivized to increase our scale, naturally, this requires capital.”

Raising capital from banks for Bitcoin ventures was not an option in China, he said, and CEO Wu Gang used to borrow money from friends to fund growth. Paying higher interest to HaoBTC’s depositors instead is actually cheaper than these private loans.

Mu also notes that, like banks, HaoBTC operates on a fractional reserve system – because funds need to be invested in growing the mining operation. The company does not wish to hide that fact from its customers, he added, which is part of its transparency ethos.

Where is Bitcoin Actually Going in China?

Like elsewhere, demand for Bitcoin waxes and wanes in China, Mu said. It’s important to be wary of over-generalizing both the cryptocurrency landscape and Chinese attitudes, as most reports tend to be anecdotal.

While anecdotal itself, Mu’s stories from HaoBTC’s Bitcoin mine in remote Sichuan province suggested a curiosity among the public.

“Some locals there expressed curiosity but they were also doubtful. Probably just like I was three years ago when I first learned about Bitcoin, they had many questions: Is it legal? Is it a Ponzi scheme? Is it secure to store? How can some numbers on computer screen be useful?”

After he returned home to Beijing, Mu received messages from the same people asking how to buy bitcoins.

HaoBTC’s support desk noted that several of its customers were older, or “definitely not tech-savvy.” Their inquiries were about setting up Google Authenticator, the possibility of reversing Bitcoin transactions sent to wrong addresses, and wanting to acquire bitcoins to participate in questionable investment schemes like multi-level marketing (MMM).

As for the future, HaoBTC is in the process of introducing a full-featured Bitcoin exchange, but is also monitoring the market closely to see what the “next big thing in the BTC space” might be.

Bitcoin in China is probably more similar to the rest of the world than people think. Everyone faces the same uncertainty, the same risks, and would happily jump at the same opportunities.

Much of what we think we know about Bitcoin in China is true: factory-sized mines, speculation and gambling, and government suspicion are all present. But the time is also coming where we look beyond those few cliches and notice new ideas evolving.

Given the lack of communication between China and the rest of the world, both in language and access to social media, it’s possible the rest of the Bitcoin world may have something to gain by observing what industry participants are doing, and see if they might work in other countries as well.

Would you like to know more about what goes on in the Chinese Bitcoin industry? How would you feel about using China-based Bitcoin services from abroad?

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Remembering Satoshi’s Vision — As it Was Written. Satoshi Nakamoto left the community in 2010, and no one has heard from the anonymous creator of bitcoin ever since. At the moment the bitcoin community has split into two factions due to the scaling debate, that coincidently started the same year Satoshi left… read more.

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Latest Comments

Hahahaha. I wll be following. You are my crypto dad.

No thank you dear stranger. There is no freakin 'chargeback' in cryptos. Go away now. with your 1.

yeah.. How will exchanges listing those coins will face this problem? By delisting them?

For those who don't know. Nano is a non mineable cryptocurrency, so it isn't vulnerable to the exact.

Never thought that hacking could be that easy. Now I should also considering about technology to.

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China's bitcoin market alive and well as traders defy crackdown

SHANGHAI (Reuters) - Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

While several exchanges have announced that they will close by the end of this month, traders have now moved to buy and sell bitcoin directly with each other on peer-to-peer marketplaces and messenger apps. Industry insiders say some overseas-based initial coin offerings (ICOs) are still being marketed.

Although the crackdown has dissuaded large swathes of less-experienced investors from participating in the trade, market participants point to the limits Chinese regulators ultimately face in controlling the industry, where many users are anonymous and difficult to track.

In the short-run, the crackdown has also created an arbitrage opportunity for investors, with the price of bitcoin in China now trading at a discount to overseas exchanges.

“They can’t set rules to stop me from investing in what I want to invest in. They say you are protecting me, but as long as I think this is good, they have no way to intervene,” said a Chinese bitcoin investor named Victor, who declined to give his full name citing current sensitivities.

“I can do over-the-counter trades or I’ll go offshore. My wallet is my wallet. I’ve never registered my identification card.”

The Chinese government on Sept. 4 ordered ICOs to cease and soon after ordered some cryptocurrency exchanges to shut. Over 15 exchanges, including the three largest players OkCoin, Huobi and BTCChina, have since announced that they will close their mainland businesses by the end of September.

While the clampdown caused the bitcoin price in China to tumble as much as 8 percent on the day of the announcement, it has since recovered to 24,101 yuan ($3,615.67) on Chinese exchange Huobi. On U.S. exchange Bitstamp, it BTC=BTSP currently trades at $4,205.

Trading has spiked generally on peer-to-peer marketplaces, according to data website Coindance. On OTC platform LocalBitcoins, China trading volumes more than doubled in the week starting Sept. 16 from the previous week to 74 million yuan. It hit an all-time-high in the week starting Sept. 23, reaching 115 million yuan in trades.

Volumes on Paxful, another smaller marketplace, also jumped to 1.7 million in the week beginning Sept. 23, up from 351,102 in the previous week, Coindance data showed.

Michael Foster, co-founder of localethereum.com, an over-the-counter marketplace for ethereum trading, said mainland China users accounted for a fifth of its 5,000 signups since it opened for registrations on Tuesday.

“The fact that bitcoin is still being traded is an indication that China isn’t looking to eliminate them, but reposition things in a way to have better control over them,” said Marshall Swatt, the founder of New York-based Coinsetter, a bitcoin exchange acquired by larger peer San Francisco-based Kraken in 2016.

Other Chinese cryptocurrency players said traders were also moving away from using Tencent’s WeChat app, to encrypted messenger app Telegram to avoid regulatory scrutiny.

Some said they were still seeing overseas-based ICOs being marketed in China. The Sept. 4 shutdown of ICOs stipulated that Chinese citizens were not allowed to invest in ICOs. Overseas ICOs have been returning money on a voluntary basis.

“The trend of digital currency transactions moving offshore is inevitable,” Zeng Danhua, the co-author of a bitcoin investment guide, told a television program filmed by Chinese financial news outlet Yicai on Wednesday.

“The regulators may have needed to shut the platforms to guard against financial risks, and there may be a bitcoin bubble, but its investment value persists.”

Additional reporting by Andrew Galbraith, Alexandra Harney and the Shanghai Newsroom; Editing by Sam Holmes

China Enlists Its 'Great Firewall' to Block Bitcoin Websites

China will reportedly block anyone in the country from accessing websites that offer cryptocurrency trading services or initial coin offerings (ICOs). Advertisements relating to Bitcoin and other virtual currencies have also been scrubbed from search engines and social media in the country.

The authorities in China have already banned ICOs and shut down domestic exchanges, but that didn’t solve the issue of people accessing foreign services within the country.

Now, according to local media, China will block access to domestic and foreign services “to prevent financial risk.” China has a long tradition of blocking unwanted foreign websites using the so-called Great Firewall of China.

“Overseas transactions and regulatory evasion have resumed,” said an article published Sunday night by the People’s Bank of China-affiliated Financial News, as quoted by the South China Morning Post. “Risks are still there, fueled by illegal issuance, and even fraud and pyramid selling.”

The central bank reportedly said it would “tighten regulations” on Chinese people’s participation in overseas cryptocurrency transactions and ICOs. According to SCMP, cryptocurrency ads have also now vanished from the Baidu search engine and the social media platform Weibo, much as recently happened with Facebook.

The latest Chinese news comes at a shaky point for Bitcoin. Having slid below the $8,000 mark on Friday, Bitcoin recovered slightly before falling again through Sunday and Monday. The price at the time of writing is $7,986.

China Is Said to Ban Bitcoin Exchanges While Allowing OTC

The Wild Swings in Cryptocurrency Investments

China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, dealing another blow to the $150 billion cryptocurrency market after the country outlawed initial coin offerings last week.

The ban will only apply to trading of cryptocurrencies on exchanges, according to people familiar with the matter, who asked not to be named because the information is private. Authorities don’t have plans to stop over-the-counter transactions, the people said. China’s central bank said it couldn’t immediately comment.

Bitcoin slumped on Friday after Caixin magazine reported China’s plans, capping the virtual currency’s biggest weekly retreat in nearly two months. The country accounts for about 23 percent of bitcoin trades and is also home to many of the world’s biggest bitcoin miners, who use vast amounts of computing power to confirm transactions in the digital currency.

“Trading volume would definitely shrink,” said Zhou Shuoji, Beijing-based founding partner at FBG Capital, which invests in cryptocurrencies. “Old users will definitely still trade, but the entry threshold for new users is now very high. This will definitely slow the development of cryptocurrencies in China.”

While Beijing’s motivation for the exchange ban is unclear, it comes amid a broad clampdown on financial risk in the run-up to a key Communist Party leadership reshuffle next month. Bitcoin has jumped about 600 percent in dollar terms over the past year, fueling concerns of a bubble. The People’s Bank of China has done trial runs of its own prototype cryptocurrency, taking it a step closer to being the first major central bank to issue digital money.

“There has been a general tightening of the screw on regulating financial and monetary conditions,” said Mark McFarland, chief economist at Union Bancaire Privee SA HK in Hong Kong. “All of these things suggest a longer term process of tightening scrutiny of activities that aren’t in the normal sort of monetary realm.”

OKCoin, BTC China and Huobi, the country’s three biggest bitcoin exchanges, said on Monday that they hadn’t received any regulatory notices concerning bans on cryptocurrency trading. All three venues reported transactions on Monday, with bitcoin rising 7.6 percent on OKCoin as of 5:09 p.m. local time.

While bitcoin users will still be able to trade cryptocurrencies in China without exchanges, the process is likely to be slower and come with increased credit risk, analysts said.

The exchange ban is unlikely to have a major impact on the prices of cryptocurrencies globally because venues outside China will continue trading, according to FBG Capital’s Zhou. The country’s role in the bitcoin market had already started shrinking in recent months as authorities tightened regulation. At one point, exchanges in China accounted for more than 90 percent of the world’s bitcoin transactions.

The bigger risk for global traders may be the massive rally in bitcoin prices, according to McFarland.

“Whenever you start to hear about Hong Kong taxi drivers becoming millionaires from buying bitcoin, you start to think this is not necessarily driven by fundamentals,” he said. “So you will get quite substantial pullbacks at some point.”

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— With assistance by Steven Yang, Gary Gao, Yinan Zhao, Yuji Nakamura, Justina Lee, and Eric Lam

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Yahoo needs to fix the problem with their app.

Yahoo Search App from the Google Play Store on my Samsung Galaxy S8+ phone stopped working on May 18, 2018.

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Analysis: Bitcoin Price Corrects on China News, But Uptrend Still Intact

The cryptocurrency market is a sea of red today, a development skeptics will no doubt quickly use to make the case against bitcoin as a 21st century gold.

In times of economic or political stress, investors prefer to hold safe haven assets, and while many experts believe bitcoin is the new safe haven, today's dismal performance contradicts such claims. The cryptocurrency dropped 5 percent over the last 24 hours, even while North Korea's nuclear test and heightened geopolitical tensions pushed up traditional safe haven assets like gold, Japanese Yen.

Overall, bitcoin (BTC) clocked an intraday low of $4,253 earlier today, and was trading around $4,335 levels on news China has banned initial coin offerings, one of the main trends powering this year's boom.

Still, the price decline comes amid an uptick in trading. CoinMarketCap data shows volumes on Bitfinex, which offers trading in the BTC/USD pair, are up 7.11 percent.

Ethereum (ETH) was the biggest loser among the top 10 cryptocurrencies, down 12.14 percent in the last 24 hours, as it remains the platform of choice for most ICOs. Bitcoin Cash (BCC) had also shed around 3.7 percent and was last seen trading around $554.

Limited impact

So, what should we make of the day's developments?

As the December 2016 close on the CoinDesk BPI was just under $1,000, the cryptocurrency has still rallied more than 400% this year.

Following a rally of such humongous proportion, a healthy correction is much needed as it serves two purposes:

• It will calm market nerves – Pundits have started comparing bitcoin mania to the 16th century Tulip bubble. A correction here would calm market nerves and help restore confidence in the bitcoin rally.
• Is heightened curiosity for real? The stellar rally in bitcoin led to increased curiosity about bitcoin and crypto space in general. Investors who missed out on the rally would want to board the bitcoin freight train during a technical pullback. Strong dip demand would indicate the heightened curiosity is for real… investors are not just curious but are willing to allocate a part of their portfolio to virtual currencies. Weak dip demand or absence of dip demand would be bad news.

Bigger uptrend is still intact

• The rising trend line from the July 16 low is still intact and could offer support at $4,133 levels.
• The chart above shows a bearish price RSI divergence, which is formed when prices form higher highs while the oscillator (in this case an RSI) forms significantly lower highs.
• The bearish price RSI divergence suggests a short-term top in place around $5,000, although only an end-of-day close below $4,133 today would abort the bullish view and signal potential for more losses towards $3,769 ( 38.2 percent Fibonacci retracement ).
• A potential for a revisit to record highs around $5,000 exists if the prices rise above the daily high of $4,611.6.
• Big gains above $5,000 levels cannot be ruled out if we see a sharp rebound over the next few days from the rising trend line support.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

China Bitcoin Exchange to Stop Trading Virtual Currencies Amid Crackdown

BEIJING — A major Chinese exchange specializing in the trading of Bitcoin announced on Thursday that it would stop trading by the end of the month, amid a broader crackdown against virtual currencies by the authorities in Beijing.

The announcement by BTC China, the country’s first and largest digital currency exchange, came days after the Chinese authorities banned fund-raising for new digital currencies, and amid worries that regulators would tighten rules surrounding currencies like Bitcoin.

The exchange’s decision is the first of its kind in China, and it raises the specter of other exchanges shutting down Bitcoin trading in the future.

China has sought to walk a tightrope when it comes to Bitcoin and similar virtual currencies. Whereas the currencies provide the country with a chance to develop new and emerging technologies, officials also worry that they would allow Chinese consumers to get around tough restrictions on how much money they can send overseas and allow them to be used to launder money.

Still, the impending closing of BTC China’s online currency trading operations is a blow to the country’s aspirations to lead the way in the sector. Some two-thirds of all Bitcoin issued daily is “mined” in China, and an array of other companies benefit from such efforts, including equipment suppliers and construction firms that build enormous Bitcoin farms.

“It’s a sad day for the Bitcoin community here in China,” said Wei-Tek Tsai, the director of the Digital Society and Blockchain Laboratory at Beijing’s Beihang University.

In a statement published on the messaging platform WeChat, BTC China said it would “stop all trading on September 30.” It said the move was in response to a decision this month by Chinese regulators to ban so-called initial coin offerings, in which new digital currencies seek to raise funds.

The price of Bitcoin dropped more than 10 percent on Thursday, to around $3,500, in the hours after the announcement.

Bitcoin is increasingly in the spotlight around the world. Its proponents — a group that includes tech enthusiasts, civil libertarians, hackers and criminals — cheer the fact that it can be sent across borders anonymously and that it is not regulated by a central authority like a typical currency.

China has emerged as the leading force in Bitcoin trading in recent years. But as the virtual currency’s profile has risen in the country, Chinese regulators have increasingly sought to control how it is traded and used. When they stepped up their oversight of Bitcoin trading this year, it led to a rapid and substantial drop in trading volumes.

“Because it is traded anonymously and peer to peer, Bitcoin makes it easy for money laundering and tax evasion,” said Sheng Songcheng, an adviser to the People’s Bank of China, the country’s central bank.

Official Chinese news media has cited officials as saying they want to close Bitcoin exchanges — a move that precipitated Thursday’s decision by BTC China — though they have not set a time frame.

China Business Network, a financial and business news portal, said on Thursday that the authorities in Shanghai, where BTC China is registered, would close all Bitcoin exchanges within their jurisdiction by the end of the month; and the report piled on further uncertainty.

Though the moves by the Chinese authorities this month have resulted in declines in the value of Bitcoin, some argue that they will allow for a more even geographic distribution in the online currency’s trading and mining.

“The overall share of Chinese exchanges has been diminishing steadily,” said Thomas Glucksmann, marketing manager for the Hong Kong-based Bitcoin exchange Gatecoin. Mr. Glucksmann said that much of the Bitcoin community had been concerned about the increased level of scrutiny in China and had been moving their assets out of the country.

“People will realize that China is out of the picture for the moment,” he said.

Amie Tsang contributed reporting from London.

China's bitcoin market alive and well as traders defy crackdown

SHANGHAI (Reuters) - Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

While several exchanges have announced that they will close by the end of this month, traders have now moved to buy and sell bitcoin directly with each other on peer-to-peer marketplaces and messenger apps. Industry insiders say some overseas-based initial coin offerings (ICOs) are still being marketed.

Although the crackdown has dissuaded large swathes of less-experienced investors from participating in the trade, market participants point to the limits Chinese regulators ultimately face in controlling the industry, where many users are anonymous and difficult to track.

In the short-run, the crackdown has also created an arbitrage opportunity for investors, with the price of bitcoin in China now trading at a discount to overseas exchanges.

“They can’t set rules to stop me from investing in what I want to invest in. They say you are protecting me, but as long as I think this is good, they have no way to intervene,” said a Chinese bitcoin investor named Victor, who declined to give his full name citing current sensitivities.

“I can do over-the-counter trades or I’ll go offshore. My wallet is my wallet. I’ve never registered my identification card.”

The Chinese government on Sept. 4 ordered ICOs to cease and soon after ordered some cryptocurrency exchanges to shut. Over 15 exchanges, including the three largest players OkCoin, Huobi and BTCChina, have since announced that they will close their mainland businesses by the end of September.

While the clampdown caused the bitcoin price in China to tumble as much as 8 percent on the day of the announcement, it has since recovered to 24,101 yuan ($3,615.67) on Chinese exchange Huobi. On U.S. exchange Bitstamp, it BTC=BTSP currently trades at $4,205.

Trading has spiked generally on peer-to-peer marketplaces, according to data website Coindance. On OTC platform LocalBitcoins, China trading volumes more than doubled in the week starting Sept. 16 from the previous week to 74 million yuan. It hit an all-time-high in the week starting Sept. 23, reaching 115 million yuan in trades.

Volumes on Paxful, another smaller marketplace, also jumped to 1.7 million in the week beginning Sept. 23, up from 351,102 in the previous week, Coindance data showed.

Michael Foster, co-founder of localethereum.com, an over-the-counter marketplace for ethereum trading, said mainland China users accounted for a fifth of its 5,000 signups since it opened for registrations on Tuesday.

“The fact that bitcoin is still being traded is an indication that China isn’t looking to eliminate them, but reposition things in a way to have better control over them,” said Marshall Swatt, the founder of New York-based Coinsetter, a bitcoin exchange acquired by larger peer San Francisco-based Kraken in 2016.

Other Chinese cryptocurrency players said traders were also moving away from using Tencent’s WeChat app, to encrypted messenger app Telegram to avoid regulatory scrutiny.

Some said they were still seeing overseas-based ICOs being marketed in China. The Sept. 4 shutdown of ICOs stipulated that Chinese citizens were not allowed to invest in ICOs. Overseas ICOs have been returning money on a voluntary basis.

“The trend of digital currency transactions moving offshore is inevitable,” Zeng Danhua, the co-author of a bitcoin investment guide, told a television program filmed by Chinese financial news outlet Yicai on Wednesday.

“The regulators may have needed to shut the platforms to guard against financial risks, and there may be a bitcoin bubble, but its investment value persists.”

Additional reporting by Andrew Galbraith, Alexandra Harney and the Shanghai Newsroom; Editing by Sam Holmes

Bitcoin tumbles on report China to shutter digital currency exchanges

NEW YORK (Reuters) - Bitcoin fell sharply on Friday after a report from a Chinese news outlet said China was planning to shut down local crypto-currency exchanges, although analysts said this was just a temporary setback.

Sources close to a cross regulators committee that oversees online finance activities told Chinese financial publication Caixin that authorities plan to shut key bitcoin exchanges in China.

Reuters was not immediately able to verify the report. But two sources in direct contact with officials at three Chinese bitcoin exchanges - Beijing-based OKCoin, Shanghai-based BTC China, and Beijing-based Huobi - said the platforms told them that they have not heard anything from the Chinese government.

The news follows China’s move earlier this week to ban so-called “initial coin offerings,” or the practice of creating and selling digital currencies or tokens to investors in order to finance start-up projects.

Greg Dwyer, business development manager at crypto-currency trading platform BitMEX, said there was confusion over whether China would close bitcoin exchanges following the ICO ban.

“If this turns out to be true, then this sell-off is substantiated, and we could see further downside over the weekend, as it could mean the large bitcoin/Chinese yuan exchanges will need to halt trading,” he added.

Bitcoin dropped to a low of $4,227 BTC=BTSP on the BitStamp platform and last traded at $4,309.80, down 6.6 percent. On Sept 2, it hit a record high of nearly $5,000.

Sharp losses such as Friday’s are par for the course for an asset like bitcoin, analysts said. Over the course of its eight-year history, bitcoin has on a daily basis risen as much as 18 percent and fallen as much as 13 percent.

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Still, bitcoin was still up nearly 346 percent this year.

John Spallanzani, chief macro strategist at GFI Group, said Friday’s losses could be short-lived. “Bitcoin is here to stay,” he said.

Jehan Chu, a partner at Jen Advisors, a Hong Kong-based early-stage blockchain venture capital firm, noted that should China shut down bitcoin exchanges, it will not be the end of the crypto-currency world in the country.

Blockchain, a digital ledger of transactions underpinning bitcoin, has leapt to prominence as it enable users to track and record assets across all industries.

“This is just China pressing the ‘Pause button,” said Chu.

A big part of bitcoin’s recent surge was the ICO craze, which exploded this year. Bitcoins and ether, another digital currency, are used to purchase tokens for ICOs.

By mid-July, tech firms had raised about $1.1 billion in 89 coin sales this year, roughly 10 times more than in all of 2016, data from crypto-currency research firm Smith + Crown showed.

Reporting by Gertrude Chavez-Dreyfuss and Angela Moon; Editing by Dan Grebler and Chizu Nomiyama