The possible halt to cryptocurrency trading in China and the attendant uncertainty may prompt local operators of virtual currency systems to go abroad, a senior researcher said.
On Thursday, BTCChina, the country's biggest bitcoin exchange based in Shanghai, suspended trading till Sept 30.
Another cryptocurrency platform Yunbi also announced on Friday its suspension on Sept 20.
Market observers said monetary regulators will likely enhance financial risk control measures next.
After the suspension on Thursday, bitcoin's price in China plummeted 32 percent to 17,000 yuan ($2,595) within the first hour. It recovered somewhat to around 18,000 yuan on Friday. Some $30 million evaporated from the value of Ethereum and bitcoin globally by Thursday after BTCChina announced the halt.
"The suspension of the bitcoin exchange may lead to a 20 percent to 40 percent drop in the cryptocurrency's price locally until it regains stability," said Deng Jianpeng, professor of law at the Minzu University of China.
"It may also cause bitcoins to flow out of the country while major (cryptocurrency) exchanges will also seek opportunities to go abroad," Deng said.
Shortly after BTTChina announced the halt, Chinese financial news outlet Yicai reported that the country plans to shut down all bitcoin exchanges by the end of this month. Yicai cited sources in Shanghai in its report.
Securities Times reported on Friday that major cryptocurrency exchanges such as Huobi and OKcoin in Beijing have been asked to announce deadlines for their trading suspension.
Deng said China may announce fresh regulations on cryptocurrency trading as over 80 percent of the global Bitcoin trade was made through the Chinese currency.
If unchecked, this would pose significant financial risk in future, experts said.
Xue Hongyan, director of the Suning Financial Research Institute, said before cryptocurrency could become a legitimate investment, it needed sufficient regulation.
"Cryptocurrency trading involves too much risk such as money laundering and criminal financing," Xue said. "Also, only when supervising authorities are able to track down the virtual currency could it possibly be accepted as an investment option."
The blockchain group Neo, usually referred to as China's Ethereum, was the first Chinese cryptocurrency exchange that moved out of the Chinese mainland.
