Bitcoin is now down almost 30% from its peak at above $5,000 on September 1.
Two business newspapers reported yesterday that Chinese bitcoin exchanges were asked verbally by regulators in Shanghai, the country's financial centre to close. In fact, BTC China, the largest exchange in China, said it would stop facilitating trades by the end of the month.
Jerome Rousselot of blockchain micro-finance startup Jita Ltd. explained that this is the second time China is acting on digital currencies.
Both exchanges said the decision to cease trading was triggered by an announcement by Chinese authorities last week banning initial coin offerings (ICOs), in which companies issue "digital" tokens similar to shares in exchange for bitcoin or other cryptocurrencies.
The Internet finance association was set up by China's central bank, and according to Reuters, it "urged members to abide by Chinese laws and not deal in cryptocurrencies".
However, not everyone feels that this is the end for Bitcoin exchanges in China.
Bitcoin's value tumbled 15 percent on Thursday to about US$3,300.
China accounts for about 90 percent of all bitcoin trading on exchanges, and demand for the virtual currency was on the rise.
The Chinese central bank has not responded to questions about the currency's future there.
Arthur Levitt, former commissioner of the U.S. Securities and Exchange Commission, said that just because the cryptocurrency markets are wildly speculative at the moment doesn't mean cryptocurrencies are going away.