Bitcoin price falls under $400 following more China news

Prices fell to below $400 today as Chinese bitcoin exchanges BTCTrade.com, BTC100.org and Huobi announced official notification of deposit shutdowns from their banks. The exchanges will be halting customer deposits from bank accounts and closing accounts between how and April 15. Although their has still been no official confirmation of a change in bitcoin policy from the People’s Bank of China, the action by the banks is the best indicator yet that a crackdown on bitcoin is in the works.

Bitcoin prices have been in steep decline since a report on Chinese financial news outlet Caixin reported that steep new controls over the buying and selling of bitcoin through the Chinese banking system were in the works. In December of 2013, the PBoC issued a statement that was widely seen as an attempt to “ban” bitcoin, driving the price from a high of $1,200 to under $700 in a matter of days. A rumor that another “ban” was in the works in late February drove prices down to the $550 range, although clarification from the PBoC saw prices rise back up to the $650 in early March.

It’s still unclear if the PBoC rumors are true. It’s equally unclear if Chinese banks are acting under the directions of the central bank, or simply closing deposits on bitcoin-related business to prevent additional risks. According to BTC China CEO Bobby Lee, his exchange has yet to receive any official notification about changes to deposits.

The timing of this steep price decline has interesting timing. On April 10, 2013, bitcoin prices crashed from a then-record of $266 to around $50 in a matter of days.