Just a couple of months ago, China was a major fundamental driving factor for cryptocurrencies. Bitcoin price fluctuation is a flagship example of how one of the world’s biggest economies can manipulate the markets at will. Whether what has transpired was helpful or hindering for Bitcoin growth is debatable, it surely did have staggering effects on the cryptocurrency’s interesting journey. With PBOC’s intervention in the activities of major Chinese exchanges for the past three months, Bitcoin prices have been experiencing heavy volatility. But after Bitcoin markets took repeated blows, finally when the Chinese Bitcoin exchanges announced ban on withdrawals for a month, the price drop impact was relatively lower than expected. But it is evident that the prices sustained because the volumes were manifested elsewhere. Let’s dive deep into how adoption has beaten Chinese supremacy in Bitcoin markets:
The Chinese grip:
For a long time, China has had good control over Bitcoin with over 96% of Bitcoin volumes coming from China. With PBOC’s policies of devaluation of Yuan to increase the return on the imports, investors looked up to Bitcoin as a hedging instrument. Also, automated trading dominates the Chinese volumes owing to the zero transaction fees. With PBOC’s restriction and tightening grip over the activities of the exchange, things looked ominous for Bitcoin’s bullishness. But before China could do further damage, things stabilized and the prices regained traction.
The adoption and the towering expectations:
With exchanges shutting down withdrawals, there was a significant drop in volumes. This was immediately covered by the new found heavy adoption in Japan at merchant and institutional level. Bitcoin legislation in Japan turned favorable with the abolishment of 8% sales tax that attracted Chinese automated traders immediately after the exchanges levied transaction fee. With realistic policies and good regulations, Japan, South Korea, Singapore and the Philippines are handling increasing volumes easily and effectively. The start of 2017 marked a tectonic shift in the Bitcoin ecosystem. China’s authority over Bitcoin slipped away with increasing and probing regulations. This manifested in other Bitcoin markets which reflects the currency’s growth.
The prices are mooning owing to the speculations over Winklevoss ETF. If the ETF is approved we can surely see the currency sky rocketing by mid 2017.