Chinese Bitcoin (BTC) Traders Turn to OTC Desks to Circumvent Ban
Trading activities on Chinese over-the-counter (OTC) desks have started to gain momentum once again just a few weeks after authorities announced plans to crack down on bitcoin (BTC) trading and mining operations, according to a Bloomberg report on May 30, 2021.
Crypto Trading Activities Gradually Resuming
It appears Chinese bitcoin traders are gradually overcoming the serious fear uncertainty and doubt triggered by the country’s fresh clampdown on crypto, as trading activities is gradually picking up on over-the-counter (OTC) desks.
Per sources close to the matter, bitcoin trading sentiment is now becoming a bit positive once again as the yuan-tether (USDT) exchange rate, which crashed by 4.4 percent a few weeks ago, when the government announced plans to ban bitcoin mining, has regained more than half of the loss.
Notably, the Chinese cryptocurrency market has always been the largest in the world. Prior to the government’s blanket ban on initial coin offerings (ICOs) and cryptocurrency exchanges in 2017, crypto investors in the region accounted for about 80 percent of the global bitcoin trading volume and owned a massive seven percent of the total BTC mined at the time.
Chinese Bitcoin Traders Circumventing Ban
While it has become quite difficult to gauge the exact level of dominance Chinese traders have in the cryptoverse, the report notes that investors from the region are actively carrying out bitcoin trading activities via OTC desks, as the country is yet to outlaw peer-to-peer trading transactions.
The P2P trading, which reportedly takes place in two major steps (bidding and payment), is facilitated by top exchanges including Huobi and OKEx and traders can only access the service via virtual private networks (VPNs).
“The first happens on OTC platforms operated by firms including Huobi and OKEx, which enables traders to post bids and view offers,” revealed the report.
Once an agreement on price is reached by both parties, a transaction is initiated, and the coins are held in escrow until the seller confirms the receipt of yuan in their local bank account, after which the coins are then released to the buyer’s wallet.
OTC trading desks and P2P trading platforms such as Localbitcoins, Paxful, and a host of others have made life easier for bitcoin traders across the globe, especially in regions where the government has banned crypto trading.
While crypto trading activities are gradually resuming in China, the exodus of bitcoin miners from the region has, however, caused a sharp drop in bitcoin mining difficulty over the past 24-hours.
At press time, the bitcoin price is hovering around $36,783, with a market capitalization of $686.92 billion, according to CoinMarketCap.
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