Bitcoin price drops $200 after new ruling from Chinese regulators

     

• Bitcoin's price fell after China announced a ban on initial coin offerings (ICOs) from $4,584 to around $4,350 per bitcoin.
• This move to be shortlived, according to experts.
• The move by China is not the first time the country's regulators have attempted to crack down on cryptocurrency.
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    The price of bitcoin fell sharply after Chinese  regulators announced a ban on organizations from raising funds using  initial coin offerings (ICOs). ICOs allow start-ups to raise  investment by selling new cryptocurrencies, which are similar to  bitcoin, in return for cash. However, the People's Bank of China says  this practice, which has become popular around the world as well as in  China, constitutes illegal fundraising.  Despite bitcoin's price falling, some expect this move to be shortlived.
"This type of news is 'universally'  negative sentiment, within the crypto space, so we are not surprised to  see a dip on all assets today," Fran Strajnar, co-founder and CEO of  data and research company Brave New Coin, told CNBC via email. "We do not see this to be a lasting issue."
 

While the ban on ICOs does not directly affect  bitcoin, the news created negative market sentiment which is weighing on  the prices of several virtual currencies, according to Charles Hayter,  chief executive and founder of digital currency comparison website  CryptoCompare. "A rising tide lifts all boats  but the opposite is also true - with generally bad news reverberating  across the ecosystem all cryptos have turned red together," he told CNBC  via email. However, Hayter added that the long-term effects of regulation are positive. "The wheat will be sorted from the chaff and a new gold standard of ICOs can be striven for," he said. Bitcoin's price fell from $4,584  shortly before the announcement to around $4,350 per bitcoin. It was  trading around the $4,429 level at midday London time on Monday,  according to market data from Coindesk. The move by China is not the  first time the country's regulators have attempted to crack down on the  cryptocurrency space. In January and February, the central bank warned  several digital currency exchanges they would be shut down if they violated anti-money laundering rules.  Furthermore, while bitcoin  dropped sharply on the news, its price has been trending down since  hitting the $5,000 milestone at the weekend. Strajnar said this recent  climbdown is most likely just profit taking by investors. "There is likely some profit  taking since reaching almost $5,000 on bitcoin, but the amount of fresh  capital that continues to pour in suggests this is not the start of a  trend reversal." 

https://www.cnbc.com/2017/09/04/bitcoin-digital-currency-price-falls-on-china-ico-ban.html