Zero fees and wash trades
While macro factors may account for China’s lead in bitcoin trading, specific details like fee structures on Chinese exchanges give a further boost to the amount of trades on Chinese exchanges.
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.
The sort of trading described by Danielli is illegal in US equities and commodities markets, where it’s known as ‘wash trading’. In these transactions, a security doesn’t technically change hands, and is effectively being traded by one party who takes both sides of the deal.
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