Home / News & Info / China Pulls in the Reins on Bitcoin Trading Surge

China Pulls in the Reins on Bitcoin Trading Surge

Bitcoin Trading Tumbles into the Red

Lovers of bitcoin are grateful to the communist state for putting the digital currency in check. Authorities in China put an end to the volatility experienced on this digital currency. In an attempt to put it under control, the government leveraged bitcoin trading on the major digital currency exchanges in the country. This saw a significant decline in the price of bitcoin by up to fifty percent. Authorities in China also put pressure on the exchanges to start charging fees on the transactions taking place in their sites. The exchanges that were under investigation included:

  • OKcoin
  • BTC China
  • Huobi.com

As a result of this new legislation, trading volume dropped by over 90%. On the first week of January when the price of bitcoins was over one thousand dollars, over four million coins were traded. Recently, close to one hundred thousand coins were traded. One can say that the Chinese investors have not been actively trading since they have taken a break for New year Celebrations. However, such a steep decline in trading can’t be wholly attributed to this. Legislative policies from the communist party of China had a big role to play in this. Most of the transactions taking place in the bitcoin space are done in Yuan. In the latter half of 2016, over 90% of transactions were in the Yuan. By close to January, less than 40% was.

Main Exchanges React Differently While Investors Suffer

The price drop in the cryptocurrency affected investors across the world. The ones who bore the greatest brunt are those from China. Due to the huge traffic in the main websites affected by investors wanting to log in and shed off their coins, there was trouble accessing accounts. The People’s Bank of China says it has started investigations in the malpractices exhibited by the exchanges during this period. The bank also reiterated in a statement that bitcoin is an asset and not a virtual currency.

This move by the Central bank has seen the major exchanges in China stop leveraged trading on bitcoins. As of 2016, the global share of bitcoin trading was significant. These exchanges were very influential commanding the price of bitcoin globally.

  • Houobi – 28 percent of the total market share
  • BTCChina – 37 percent of the global share
  • OKCOIN – 31 percent of the global share

btchuobiok

Other platforms have also made significant changes to their terms of trading. The major exchanges have reduced their leverage to 1. “This move will put some stability on the price of bitcoins. It will reduce the volatility experienced in bitcoins and this will definitely argue well for the currency in the long term,” said one an OTC trader.

Chinese investors depend heavily on the volatility of the digital currency to make their trade move. This policy will definitely impact a huge majority of them.

The CEO of BTC China said, “We are making adjustments to our exchange as a result of the policies implemented by the People’s Bank Of China. We have so far received informal guidance from the PBoC and moving forward, we expect to intensify consultation with them so as that there is going to be a mutual agreement on this.”

BTC China is the site that has been most forthcoming with press releases concerning these latest developments. Other exchanges like OK coin and Huobi instead preferred to implement the changes silently. Investors at OKcoin reported that trading on leveraged bets had been suspended on this platform.

The reaction among investors in China was also varied. Some claim that even after the suspension, they could still be able to transact on leveraged bets. Still, others say that they could see options for borrowing higher margins but could only be able to access lower margins. Officials from these other exchanges were not forthcoming when prompted on these allegations.

Social Media Response

News about this spread quickly on social media across the world. Some of the industry leaders claimed that they had seen this coming and it was long overdue. Traders also claimed that the news did not come as a surprise seeing that the exchanges operated without clear guidance and legislative processes on how they are to carry out their operations.

One trader and online casino player at Bet in BTC said ”The exchanges have been in the dark and basically left to their own devices when it comes to trading. This may restore some sanity in this landscape.”

Investors across the world have lauded this move. Most are saying that it will help to restore balance in the trading of bitcoins.”This is a welcome move as it will make bitcoins stick to the normal factors of supply and demand. This will mean that there is an end to nonexistent bitcoins generated by exchanges. The communist state is not stifling the growth and usage of this digital currency,” An OTC trader and casino player at PlayVivid Casino said.

“What it is doing, is that it is trying to protect the interests of its investors locally by putting in place legislative processes that will cushion the investors from unwanted risk. This not only brings stability to the digital currency but also acts as a way of safeguarding global investors from volatility risks.” said another trader and Wheel of Bitcoins player.

Check Also

Cyber attacks and addiction solutions for cryptocurrency users

Cyberattack and Addiction Solutions for Cryptocurrency Users

Online gambling is ever increasing in popularity since the inception of the first online casino …

Leave a Reply

Your email address will not be published. Required fields are marked *