Deposit Freeze at Chinese Exchanges Drives Bitcoin Price Below $400

The price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) fell below $400 for the first time since November 2013 on 10th April, as major China-based bitcoin exchanges began reporting that they had received notice that their bank accounts would be shut down by banking partners.

The initial drop occurred following an announcement from Chinese exchange BTCTrade.com, which was then corroborated by similar statements from Huobi and BTC100.org.

The price of bitcoin has fallen rapidly in recent weeks, after rumors surfaced on 27th March that suggested the PBOC, China's central bank, would be looking to more tightly enforce restrictions it passed in December meant to ensure a separation between its nationalized banking system and the nascent digital currency industry.

Though no official announcement of the new policy has been made, the statements from major exchanges suggest that the rumored 15th April deadline for the enforcement of this stricter rule interpretation is being enforced.

As illustrated by the USD BPI, the sell-off began at approximately 1:00 UTC on 10th April.

The price fell from $440 to $410 within a few hours of BTCTrade.com's initial announcement, before fluctuating between $407 and $412.

At 15:00 UTC, the price began to fall precipitously, tumbling from $406 to $389 by 15:15 UTC. Two hours later the price briefly climbed above $400 before sliding into the $390 range.

At press time, the price of 1 BTC on the USD BPI was $381.

Chinese markets reacted quickly to the news from domestic exchanges.

According to the CoinDesk CNY BPI, the price slipped from ¥2,726 to ¥2,490 within five hours of the announcement.

After reaching a then-low of ¥2,248, the price fluctuated over the next 10 hours, peaking at ¥2,531 at 8:30 UTC. The price began to fall at approximately 14:30 UTC, slipping from ¥2,508 to ¥2,424 over the next 45 minutes.

At press time, the price of one bitcoin on the CNY BPI was ¥2425.

Images via CoinDesk