Both the bitcoin price and ethereum price went into free fall on Thursday following multiple reports that various Chinese government agencies are preparing to ban cryptocurrency exchanges.

As CCN.com reported, official Shanghai media source Yicai Global alleged that the Shanghai Financial Office has “verbally halted” bitcoin exchanges from operating within the city. Shortly after, Shanghai-based bitcoin exchange BTCC announced it is suspending trading effective at the end of September, although it cited last week’s initial coin offering ban as the reason for its trading platform closure.

Also this morning, China Internet Finance Association (NIFA) member Zero One Finance published a newsletter claiming that a government regulator had “asked the major currency exchanges to close the program,” according to a rough translation. Although the closures might not take effect for several months, the regulator stated that “Banning Bitcoin exchange is certain.”

As of writing, regional cryptocurrency news service cnLedger was reporting that OKCoin and Huobi had not received closure notices from regulators.

The Slippening: Market Plunges Below $120 Billion

These events sent the cryptocurrency markets into free fall. Less than a week ago, the total value of cryptocurrencies was above $160 billion. The markets declined throughout the week as the rumor mill grew, eventually resting at $135 billion on Wednesday.

Following the reports by Zero One Finance and Yicai Global–along with BTCC’s exchange closure announcement–the market crashed further still. Between 8:00 and 12:00 UTC, the total crypto market cap fell more than $15 billion. At present, the market sits at $119.7 billion–its lowest point since August 8.

Bitcoin Price Dives Below $3,500

The bitcoin price immediately flash crashed on Chinese bitcoin exchanges, with BTC/CNY falling below $3,300. The global average bitcoin price dipped to about $3,400 but has since recovered to $3,493, with bitcoin trading above $3,500 on most non-Chinese exchanges. Bitcoin presently has a market cap of $57.9 billion, representing a daily decline of about 10%.

Despite the continued uncertainty Chinese bitcoin traders now face, industry analysts are not worried about bitcoin’s long-term prospects. In fact, many see this downturn as an opportunity for investors to increase their holdings and other nations–particularly Japan–to emerge as stronger participants in the cryptocurrency ecosystem.

Ethereum Price Falls Near July Lows

The ethereum price also entered a steep decline on Thursday, plunging as low as $232 at 13:00 UTC. This put ethereum at its lowest point since August 5 and represented a decline of 41% from its September high. The ethereum price has since climbed back to $241, bringing its 24-hour decline to 11%. The ethereum market cap is currently $22.8 billion.

Altcoin Market Caps Disappear

Altcoins rarely fair well during market downturns, and today was not an exception. Ninety of the top 100 cryptocurrencies experienced 24-hour declines, and many of those pullbacks exceed 10%.

The bitcoin cash price crashed by 17% to $417. The Ripple price fell 10%, but its $6.9 billion market cap is now just $25 million behind that of bitcoin cash.

Fifth-ranked litecoin saw its price dip as low as $46; this is its lowest point since August 22. At present, the litecoin price is trading just under $50, which translates into a daily decline of 19%.

Privacy-centric Dash and Monero each fell about 10%, while NEM and OmiseGO posted 14% declines. The IOTA price returned the best performance in the top 10, dipping 7% to $0.484. Ethereum classic maintained its 10th-place spot but is at risk of seeing its market cap drop below $1 billion following today’s 18% decline.

Featured image from Shutterstock.