One of the longest-running and the first Bitcoin and crypto exchanges in China has announced closure following the recent crackdown from Beijing. Last Thursday, June 24, BTCChina announced that it has ‘completely exited from bitcoin-related business’.
Besides, as reported by the South China Morning Post (SCMP), the crypto exchange also liquidated its stake in Singapore-based bitcoin exchange ZG.com last year only. Founded in 2011 by Huang Xiaoyu and Yang Linke, the crypto exchange had been in business for almost a decade.
Being early in the game, BTCChina pushed the craze of crypto among Chinese investors in its early days. At one point, BTCChina also facilitated around 80% of the crypto trades from the country. However, it later came under the pressure of strong regulatory measures initiated by the Chinese government.
Back in 2018, a Hong Kong-based blockchain investment fund acquired the exchange business of BTCC. Later the exchange continued to function outside China’s regulatory wall. The recent decision seems to be a final nail in the coffin of BTCC’s operations.
The company noted that it will shift its operations to blockchain-based applications instead of trading. Some of China’s oldest businesses in the crypto industry have decided to shut shops amid the recent regulatory crackdown. China’s crypto mining industry is witnessing a major exodus of Chinese miners who have been moving base to other overseas locations like North America and Europe. As per industry estimates, over 90% of Bitcoin mining operations in China are now shut down.
China’s Trillion-Dollar Mistake
“There’s a forced and there’s a rushed exodus of capital and mining from China that was a bit of a surprise. China had a 50% market share of Bitcoin and they were generating 10 billion dollars a year growing at 100% year-over-year. I think that given the growth rate of Bitcoin this will prove to be a trillion-dollar mistake”.
Saylor said that China’s recent regulatory action has brought an of crypto miners to North America. MicroStrategy has been making aggressive Bitcoin purchases in recent times. Just last week, the cloud software company purchased an additional 13,000 BTC taking its total count of BTC holdings to more than 100K Bitcoins.
It’s difficult to say whether if China’s regulatory action will prove costly or not. On the other hand, the world is closely watching America’s official take on crypto. The US SEC will come up with a crypto regulatory framework by next year.