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Author Topic: [2014-09-27] CD: Chinese Markets’ Dominance Poses Questions  (Read 617 times)
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September 27, 2014, 05:47:00 PM

Chinese Markets’ Dominance Poses Questions About Global Bitcoin Trading Flows

China’s position as the most active bitcoin trading market has come to attention again as Beijing exchange OKCoin topped daily dollar trades for the first time earlier this week. This comes weeks after Shanghai exchange BTC China highlighted that yuan trades comprised more than 70% of trading volume.


Danielli pointed to OKCoin’s margin-trading structure as one reason trading volumes have grown on that exchange. As users trade more, they accumulate ‘reward points’ that allow them to borrow more yuan for margin trading. CNY-BTC trading is free on OKCoin and Huobi.

“People are ‘trading with themselves’ to increase volume and get to [the desired points level],” Danielli said.


Tim Swanson, who has written books on business in China and works for Hong Kong-based altcoin exchange Melotic, pointed out that even with possibly-inflated yuan trading volumes, dollar trades may actually be far greater, but aren’t represented in the data because they’re traded over-the-counter.

Swanson noted that miners and US-based ‘universal’ bitcoin firms like BitPay or Coinbase could be processing thousands of coins daily with counterparties with large fiat and bitcoin holdings, but are never traded on an exchange.

“The OTC and off-chain liquidity inventory is not being factored into most of the overall discussion on trade volume. The aggregate volumes of OTC or ‘dark inventory’ numbers may actually be larger in US dollars than [yuan],” he said.

also some nice charts and graphs.

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