As we noted earlier, bitcoin has been unable to meaningfully reverse the drop that followed reports that Chinese authorities were planning to shut down local digital currency exchanges as part of a crackdown on ICOs. The news, which first surfaced in China-rsquo;s state-owned Caixin media network, which presumably has sources deep within the Chinese government, sending bitcoin spiraling lower as investors feared that 23% of the market-rsquo;s overall trading volume might soon evaporate.
Yet, days later, the country-rsquo;s largest digital-currency exchanges say they-rsquo;ve heard nothing from Chinese authorities.
And in another development that will certainly have market participants scratching their heads, the daily trading volume of the Chinese bitcoin exchange market has suddenly surged to nearly double that of the US market. For the first time since November 2016, the Chinese market even briefly overtook the US in terms of market share, as cryptocurrency news points out.
However, unlike in past instances when Chinese volume overtook the US, bitcoin in China continued to trade at about a $200 discount to US-traded pairs. The premium persisted for years, until the imposition of strict regulations and policies on bitcoin trading platforms in 2016. It has since shifted to other markets, like Japan and -ndash; even more notably -ndash; South Korea.- -
Bitcoin Price in USD
Bitcoin Price CNY:
The spike in volume triggered a surge in price, as the Chinese market rose by more than 9% on day when bitcoin prices trading in the US, Japan and SK were largely flat.
And perhaps because the initial reports stipulated that peer-to-peer bitcoin trading wouldn-rsquo;t be affected by the crackdown, the Chinese over-the-counter and peer-to-peer bitcoin markets such as LocalBitcoins has also increased over the past two weeks, as Cryptocoins News points out.
For their part, the exchanges believe the ban will not be carried out-hellip;
-ldquo;Huobi, OKCoin and BTCC, the three leading bitcoin exchanges in China, have all stated that they do not believe the ban will be approved and are not even sure if it is the actual plan of PBoC. The three companies reassured their clients that they have not received any directives from PBoC and that they are willing to comply with any requests from the Chinese government and its financial regulators.-rdquo;
Hu Bing, a researcher at the Institute of Finance and Banking, a Chinese government-supported academic research organization, said recently that any ban would be temporary.
-ldquo;The Chinese Academy of Social Sciences and its Institute of Finance and Banking are affiliated with the State Council of the People's Republic of China, the chief administrative authority of the People-rsquo;s Republic of China. The Chinese Institute of Finance and its researchers are considered to be a government institution and government officials.
In his interview with CCTV translated by Box Mining, Bing explained that the suspension on ICOs and the government-rsquo;s declaration of ICOs as an illegal fundraising method are only temporary, until local financial regulators introduce necessary regulatory frameworks and policies for both ICO investors and projects.
More importantly, Bing emphasized that the Chinese cryptocurrency community must understand that the government has not -ldquo;forbidden-rdquo; ICOs but instead -ldquo;paused-rdquo; them, demonstrating the government-rsquo;s intention to resume ICOs in the near future. Bing also noted that the Chinese government and its financial regulators are currently considering the potential of allowing ICOs to raise money in a controlled environment, through a licensing program.-rdquo;
Russian Finance Minister Anton Siluanov- clarified that banning digital currencies would make no sense, adding that his country-rsquo;s government would develop a plan to regulate them this afternoon.