Úno 20

LocalBitcoins Trading Up 1,200% in China Since PBoC Clampdown

· February 20, 2017 · 7:30 am

LocalBitcoins has recorded an exponential 1,200% surge in China trading since the country’s exchanges started reacting to pressure from the People’s Bank of China (PBoC).


36 Million Yuan Per Week and Counting

The week ending February 18th was the best on record for the peer-to-peer marketplace, which registered a global high of over $24 million USD in transactions.

The Chinese market, until just a few weeks ago practically dormant, saw a giant 36 million yuan in transactions compared with the previous week’s 6.6 million, which itself was a previous high.

coin-dance-localbitcoins-all-volume-1

LocalBitcoins has seen a rapid increase in usage for the past few months from countries around the world. Venezuela, Canada, Turkey, and New Zealand have all recently peaked on the platform, due variously to financial clampdowns or – in New Zealand’s case – the closure of one of its longest-running exchanges due to “banking hostility.”

Spreads in highly active markets are unsurprisingly wide, with Chinese users especially paying a premium for convenient fast access to fiat or cryptocurrency.

Lee: PBoC ‘Taking Scrutiny More Seriously Than 2013-14’

February 18th also saw Bobby Lee, CEO of major Chinese exchange BTCC, take to Reddit for an AMA session with the community.

bobby_lee_bitcoinist

While much of the discussion focussed on issues related to Chinese miners’ support of scaling solutions for the Bitcoin network, Lee was predictably coy on matters involving regulators.

“I think that compared with 2013/2014, this time, the PBoC is spending more effort on this and taking it more seriously,” he wrote, adding:

The PBOC will have a strong say in how the bitcoin exchange industry evolves in coming years.

He added he could not comment on topics discussed behind closed doors “beyond what was already announced publicly.”

Over-The-Counter Real King of CNY/BTC?

But despite the LocalBitcoins figures being impressive, their overall effect could be little more than a drop in the ocean. A recent report by WSJ China on Bitcoin’s entry and exit from China highlights three main ways investors are using the currency – and LocalBitcoins is not one of them.

“There are several options: premium-taker, foreign futures exchange and OTC (over-the-counter),” a translation of the original article from news resource 8btc reads.

Bitcoinist_NodeCounter Variety

Given the extremely tight margins involved, even for high-frequency traders, it is likely that the last of these methods is seeing the most action.

“OTC traders are looking for each other through mobile apps, social media tools, forum, website or offline meetups,” 8btc reports.

Some major OTC dealers are hiring people to spam online. Wechat chatbot are being developed for OTC purpose. With the absence of exchange-like monitoring, OTC trading will be even harder to track.

Where do you think is the bulk of Chinese Bitcoin trading happening currently? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter, Coin.dance

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Led 25

PBOC to ‘Continue Focus’ on Exchanges as Volumes Plummet

· January 25, 2017 · 7:00 am

Bitcoin’s price dropped slightly after the People’s Bank of China (PBOC) published a summary of its findings after inspecting major Chinese exchanges.


PBoC: ‘Continued Focus’ on Exchange Activities

“According to the initial inspection and the problems found, the inspection group decided to continue to focus on payment and settlement, anti-money laundering, foreign exchange management, information and financial security and other aspects of further inspection,” the translated statement reads.

Investigators suggested that investors should pay attention to Bitcoin platform transactions, such as legal compliance, market volatility, financial security and other risks, careful participation in Bitcoin investment activities.

The Bitcoin price had remained largely unfazed as new Chinese exchange fees caused trading volumes to crash by over 90% in 24 hours.

Following reported criticism by a regulatory inspectorate last week, major Chinese exchanges BTCC, Okcoin and Huobi all implemented a 0.2% trading fee Monday to “curb manipulation and extreme volatility,” as BTCC described it.

The move hit China’s giant automated trading market, which had previously enjoyed zero-fee transactions.

Figures now show that for all three exchanges, trading has decreased in volume by roughly 90%.

Far from causing panic, many are suggesting the move will remove volatility from Bitcoin’s price for good, given that China’s toll-free environment had previously comprised up to 98% of trading.

While mainstream media attempted to spread its oft-quoted doom and gloom, BTCC COO Samson Mow said the publicity was simply “good for Bitcoin.”

Former Bitcoin Foundation Director Jon Matonis added that Chinese exchanges had effectively “taken one for the team,” however, echoing comments by a local Bitcoin hedge fund owner that they were “cutting off their aim to stay alive.”

Japan Overtakes China

Commentators on social media continued the positive speculation, citing “organic growth” and less manipulation making Bitcoin more appealing for wary investors in the long term.

These could potentially include instruments such as Bitcoin ETFs, the first of which has spent three years awaiting US regulatory approval and is still considered by analysts to have slim chances of slipping through the net.

Meanwhile, statistics are providing interesting reading in terms of how the Bitcoin trading landscape could look in the future. As Bitcoinist reported previously, Japan’s exchange scene had reached the number two spot prior to the Chinese drop, and volumes in the country are now topping global charts, beating even the US.

What do you think about the People’s Bank of China’s latest announcement and the impact of lower Chinese trading volumes? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter

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Lis 04

Did Chinese Rumors Crash the Bitcoin Price? How Accurate Are They?

Source: bitcoin

Bitcoin Chinese Money

Bitcoin’s recent bull run ended with a thud on 3rd November, reaching above $740 before crashing to around $685 in just a few hours. Was a rumor of further Chinese restrictions on Bitcoin exchanges to blame? And if so, how accurate is the news?

Also read: AirBitz and WINGS Partnership Secures Future of DAOs

Chinese Rumors Start to Spread… Again

Dramatic financial news site ZeroHedge reported on 3rd November that Chinese regulators “are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad.”

While speculators have often wondered about Bitcoin’s effect on capital flight from China, others doubt it has any impact at all. BTC price movements in the past have appeared to correlate with Chinese monetary policy announcements.

ZeroHedge cited “Bloomberg sources” as the story’s origin, though provided no link. On Reddit, readers were skeptical given recent positive signs such as last weekend’s First World Blockchain Conference in Changsha. Several high-level political officials attended the conference, which was organized in part by China’s Ministry of Industry and Information Technology (MIIT).

By press time, the BTC price had rebounded substantially back to $702, though not back to its previous highs.

Has Anyone Else Heard the News?

Chinese Bitcoin news and information portal BitKan said the Bloomberg news was a hot topic in its office this morning. However although other media outlets were repeating the story, no-one has been able to find where the original report came from.

Local Chinese news reported the information as such (translated):

“According to Bloomberg News, PBOC and other Supervision department are analyzing and planning to launch measures, to restrain exchanging CNY to USD via Bitcoin transactions. Measures which are in consideration may include restraining Chinese exchange platforms transferring Bitcoin to overseas exchange platforms, or setting limits on amounts of bitcoin removed to overseas exchange platforms.”

BitKan reported no-one in the Chinese Bitcoin industry had heard any information from the government directly. However, since Chinese policy rumors first started to impact Bitcoin in 2013, the government has rarely communicated with companies directly.

However founder Edward Liu suggested the news may not be bad, even if true. Speaking to Bitcoinist, he said:

“if the news is true, it shows that the Bitcoin industry has got growth in China. Also, being regulated is a necessary stage for every growth industry. If the Chinese goverment lauches any regulation about the Bitcoin industry, BitKan will make efforts in cooperation.”

Other China-based industry representatives also said they hadn’t heard any such news.

Virgilio Lizardo Jr. of Bitcoin multi-services firm Bitbank, which is involved in both exchange and large-scale mining operations, said: “Total nonsense, China is taking a more positive approach to Bitcoin and blockchain technology. The conference is proof positive of that.”

China’s Bitcoin ambassador Willson Lee, who just assisted in organizing the recent blockchain-themed conference for high-level Chinese party officials, said he’d not heard anything about a policy change.

Let’s Wait and See

So was the original report real? Or are outlets simply re-reporting a rumor, with the inevitable price movements?

At press time, the industry is still waiting for confirmation from sources other than Bloomberg. While the news does not appear anywhere on Bloomberg’s news site, the service provides an instant news feed to terminal subscribers which often does not appear elsewhere.

Bitcoinist will keep an eye on this developing story and report updates as they become available.

Did you make or lose any money on the previous 12 hours’ volatility? How much influence do Chinese traders have on current bitcoin value? Let’s hear your thoughts.


Images via Shutterstock

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Did Chinese Rumors Crash the Bitcoin Price? How Accurate Are They?

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Led 05

People’s Bank of China Intervention in Stock Market Debacle Lacks Transparency

Source: bitcoin

People’s Bank of China Intervention in Stock Market Debacle Lacks Transparency

Yesterday’s news regarding the Chinese stock market once again showed how brittle the global economy is at this point. With stocks tumbling slightly over 7 percent, trading was suspended a few hours before the markets closed. Things did not get off to a good start earlier today, as an early 2% loss was worrying a fair few investors. But things calmed down once the People’s Bank of China intervened and poured money into money markets.

Also read: Bitstamp Enables Bitcoin Purchases Through Plastic Cards In UK And Slovenia

People’s Bank of China Intervenes in Trading

Based on the information provided by Reuters, it looks like the People’s Bank of China prevented another major loss for the CSI300 earlier today. Early traded prompted another 2% stock decline, which indicated another 7% less for the day was within the realm of possibilities. If this event had transpired, nation=wide trading in China would be suspended for the second day in a row.

Thanks to an intervention by the Chinese central bank, as well as the stock regulator, the earlier losses were somewhat stemmed at the right time. However, it took close to US$20bn poured into money markets by the People’s Bank of China to reduce the losses to just 1%.

At the same time, further restrictions on selling shares by major stockholders in listed companies were announced by the China Securities Regulatory Commission. Whether or not this announcement will set off further panic selling over the next few days, remains to be seen, as the Chinese stock market seems to have calmed down for the time being

It will prove to be quite a challenge to keep the volatile stock market in China somewhat stable over the next few months. Government intervention may have saved the day for the time being, but moves like these could have an adverse effect as well. Suppressing trading volume is not a smart decision, as it could lead to even wider price swings throughout the rest of the year.

Furthermore, there are rumours circulating regarding the further depreciation of the Chinese Yuan, although there has been no official indicators whether or not this will be the case. At the same time, the government and People’s Bank of China can only keep things artificially afloat for so long, despite their best efforts.

Lack Of Transparency Could Hurt Chinese Economy

The uncertainty regarding the current economic state of China will not do any good for the country’s economy. Government interventions are announced, but very few details are made public. For example, no one knows for sure where the US$20bn came from that was pumped into money markets by the People’s Bank of China.

By embracing blockchain technology, more transparency could be created for the central bank, government officials, and investors alike. Movements of funds between sources could be traced publicly, giving investors an indication as to what is going on. Keeping this shrouded in mystery is the last thing the Chinese economy needs right now.

What are your thoughts on the action by the People’s Bank of China to keep the stock market afloat? Let us know in the comments below!

Source: Reuters

Images courtesy of PBOC, Shutterstock

The post People’s Bank of China Intervention in Stock Market Debacle Lacks Transparency appeared first on Bitcoinist.net.

People’s Bank of China Intervention in Stock Market Debacle Lacks Transparency

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