China Had Virtually No Effect on Bitcoin in Mid-Term, Price Surpasses $4,600
On October 8, the bitcoin price surpassed $4,500 for the first time since September, prior to the imposition of a nationwide ban on cryptocurrency exchanges by the Chinese government. Today, on October 9, the bitcoin price entered the $4,600 region, demonstrating strong resilience towards the exit of the Chinese cryptocurrency exchange market.
— Joseph Young (@iamjosephyoung) October 8, 2017
Throughout 2017, before the government’s ban on cryptocurrency exchanges, the Chinese bitcoin exchange market accounted for 10 to 13 percent of global bitcoin trades, remaining as the third largest bitcoin exchange market behind the US and Japan. Until the Chinese government’s abrupt announcement to halt cryptocurrency trading in the region, the global cryptocurrency community were highly optimistic in regards to the long-term growth of the Chinese bitcoin market because the government had closely cooperated with local cryptocurrency trading platforms in establishing practical regulations.
The official introduction of the ban on cryptocurrency exchanges by the Chinese government in September triggered a restructuring of the global cryptocurrency exchange market. Bitcoin trading volumes from the Chinese market moved to Japan and South Korea, while some local investors have started to utilize over-the-counter (OTC) markets to trade Bitcoin, including LocalBitcoins.
In a relatively short period of time, Japan evolved into the largest Bitcoin exchange market in the world, overtaking the US by a significant margin. As it demonstrated an exponential increase in demand and growth, the Japanese government also imposed a nationwide licensing program for bitcoin exchanges, authorizing cryptocurrency trading platforms as legitimate financial services companies in the country.
Yuzo Kano, the CEO at Bitflyer, Japan’s largest cryptocurrency exchange with over 800,000 active users, stated:
“Japan has been exploding with demand for both bitcoin trading as well as virtual currency services. The FSA’s approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency’s openness and forward thinking regulation could not come at a better time for the blockchain space,” said Kano.
Due to the overwhelming performance of the Japanese and South Korean Bitcoin exchange market, the Bitcoin price recovered beyond its previous peak prior to the cryptocurrency exchange ban by the Chinese government. More importantly, because of the structuring of the global cryptocurrency exchange market and the flow of trading volumes from China to more stable markets in Japan and South Korea, institutional investors and large-scale conglomerates have begun to demonstrate their optimism towards the cryptocurrency market.
Recently, NSC, the holding company of Nexon, the $10 billion gaming company in Japan, acquired Korbit, a major South Korean cryptocurrency exchange at a $140 million valuation.
Image License: Pedro Szekely, commercial use