Did Bitcoin Surge because of Bitcoin? Rumors abound that China Bitcoin interest is the reason why BTC recently surged.
China, of course, is the spiritual and actual home of Bitmain, one of cryptocurrency’s highest valued startups, and of key crypto projects like NEO and Tron. However, the nation’s stringent ban and restrictions on this market has thrown many for a loop.
It isn’t a secret that the Central Bank of China proudly introduced these regulations, which include bans on foreign crypto exchanges, events, and certain trade publications. They also did so with gusto and proclaimed it a resounding success.
But somewhere, somehow, Bitcoin trading interest from Chinese investors has returned. Locals are reportedly skirting local regulations to get their hands on BTC, and this is no doubt due to Bitcoin’s rally above $5,000.
Bitcoin began to show small signs of bullish behavior in mid-March, something we at Crypto Traders Pro had noticed as well. Anton Pagi, a cryptocurrency researcher, revealed that the move was caused due to an unptick in exchanges known to have Chinese audiences. To illustrate his point, Pagi drew attention to a chart from CoinLib, a data analytics provider, which accentuated that there was a larger than normal influx of Chinese fiat into Bitcoin and other cryptocurrencies.
With Bitcoin’s recent re-entry into the critical psychological level of $5,000, the Chinese are back in full force – the term “Bitcoin” has skyrocketed to the top of Baidu’s trending searches as well as on Google Trends.
Huobi and OkEX’s individual over-the-counter (OTC) portals are reportedly registering trades of Chinese Yuan-to-Tether (USDT) at a rate of 7.0, rather than the market rate of 6.7. While this isn’t a definitive sign that investors in the Asian nation are flocking to purchase Bitcoin, the South China Morning Post (SCMP) has revealed that Chinese traders have expressed a clear propensity to use stablecoins to bypass governmental firewalls. The easiest way to do this was by using a VPN to purchase USDT (or a similar stablecoin) through fiat portals, and then trade on foreign non-KYC platforms.
Why now though? Well – we can take a look at traditional finance moves to glean our answers – the Hang Seng Index rallied 20% since the end of 2018 – that’s an impressive gain for just 4 months. Investors could be looking to park their gains in non-sovereign assets like Bitcoin. Traders could also be looking to add a bit of risk to their portfolio for gains – this is a move that has proven profitable in the past.
This leads to the all-important-question of: Was China responsible for the recent uptick? Probably not. But the region’s increasing interest in Bitcoin has definitely played a positive role in BTC’s day-to-day valuation. It’s impossible to gauge how much BTC and other digital assets are transacted through OTC desks – the nature of OTC makes that impossible. However, China’s quiet yet triumphant return to Bitcoin and their gusto for the asset isn’t a bad sign for the cryptocurrency.
What do you think? Let us know what you think caused the recent uptick in Bitcoin on our Facebook page!