Bitcoin trading volume has been
plummeting across all major Chinese exchanges. That is not entirely unexpected,
considering these platforms have removed most of their margin trading options.
Moreover, trading fees have been reinstated across Chinese exchanges, which
will heavily impact trading activities. For the time being, this has not
impacted the Bitcoin price all that much, though.
The one-hour trading volumes across
most major Chinese bitcoin exchanges took a big hit. Earlier tonight, OKCoin’s
volume dropped by 89% compared to Monday. BTCC and Huobi were hit by similar
declines. Interestingly enough, now that trading volume is drying up, the
bitcoin price remains virtually unchanged. That is a positive sign for this
otherwise volatile cryptocurrency, and a somewhat unexpected development.
TRADING FEES RETURN ON CHINESE EXCHANGES
Over the past few years, Chinese
bitcoin exchanges have been dominating the trading markets. That was mainly due
to there being no trading fees across the cryptocurrency markets, allowing for
high volume and volatility. However, that situation has come to change, as all
Chinese exchanges reinstated trading fees on Tuesday evening. Most of these
platforms had hinted at this upcoming change, ever since the PBOC investigated
these companies a few weeks ago.
It is evident this change will impact
the bitcoin landscape as a whole. Now that every trading region has trading
fees once again, volatility in the market will come to a halt over time. No one
wants to sell bitcoin and take a big hit due to the trading fee. It is a mental
hurdle that needs to be overcome by Chinese traders. It is positive to see the
BTC price has not changed all that much, despite a small sell-off yesterday
evening.
Speculative trading has been a thorn
in the side of Chinese regulators. All bitcoin exchanges in the country either
removed leveraged margin trading, or reduced to it to 1x leverage. This will
affect the CNY bitcoin volume, and other exchanges may benefit from this
change. Chinese bitcoin exchanges want to appease regulators, even if that
means taking some difficult decisions.
In the long run, suppressing
volatility and speculation will be positive for the bitcoin market. The markets
have been dominated by speculators for many years now, creating a very volatile
ecosystem. That situation has now come to a screeching halt, and it will be
interesting to see how things evolve in the next few weeks. All things
considered, this is a positive development for bitcoin.
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