Bitcoin and altcoins have dropped up to 25% in hours after rumors the Chinese government is banning cryptocurrency exchanges once again.
Comments surfacing on social media link to local media outlet Caixin, which suggests regulators are seeking a shutdown of exchanges as part of the ICO ban imposed earlier this week.
Markets have reacted sharply, Bitcoin losing over 8% to head towards $4200 from $4670, while Litecoin fell 15% and others followed.
NEO, the Chinese ICO project especially affected by regulatory upheaval, lost 25%.
While little evidence has appeared to support a full ban on trading, even under this eventuality, Chinese authorities are repeating behavior already seen once in 2017.
January’s several-month exchange ban lasted until May, when new guidelines came into effect allowing trading to resume.
As such, the knee-jerk reaction seen Friday is already being labeled ‘FUD’ by some commentators.
Prices had recovered through this week after the impact of China’s ICO ban waned in record time.
From lows of $4008 Monday, Bitcoin regained all its lost ground, only to lose half of it once again as of press time.