Top Exchanges To Go On With Total Exit Plans From China On December 31st
Top cryptocurrency exchanges have reiterated their exit plans from China by the end of 2021. For most of them, December 31st, 2021 will mark the end of services for customers from China. This move became necessary after the rigorous approach taken by the Chinese authorities towards ensuring an end to cryptocurrency activities within the country.
The banning of cryptocurrency activities by the Chinese government was one of the major events of 2021. Unlike in the previous years where such pronouncements did not see a substantial follow-through, this time around, the authorities in China went all out to achieve the proposed clean-up.
This action by the authorities in China resulted in a domino effect that snowballed across the entire cryptocurrency industry. At intervals, when updates about the ban were released, Bitcoin and cryptocurrency prices tumbled, experiencing significant volatility. One of the recent falls saw Bitcoin price fall from an all-time high (ATH) of $69,000 to as low as $42,000.
The falling prices of Bitcoin and cryptocurrencies at these intervals have been attributed to a sell-off mainly from China. It has been suggested that as service providers continue to exit the region, many users are liquidating their holdings due to the fear of the unknown. For others, the impending inability to locally access these service providers is the reason why they are quitting the cryptocurrency marketplace.
The fears of these users may be justified, as most cryptocurrency exchanges that operate in China already began systematic withdrawal processes a couple of months ago. The remainder of them have set a target of December 31st as the final bus stop for Chinese customers.
Earlier in the year, Huobi, one of the biggest cryptocurrency exchanges in China restricted Chinese citizens from crypto derivatives trading and some mining services. It also announced that it will make a final exit from the country by the end of the year while advising users in China to withdraw their funds before the expiry of the December 31st, 2021 deadline.
On December 25th, 2021, the exchange re-emphasized its stand and notified its customers that after December 31st, 2021, Chinese users that have not completely withdrawn their funds from the exchange will be liable to management fees.
MEXC Global, another top cryptocurrency exchange that operated in China has also emphasized its plans for a more universal approach, as it plans to retire mainland China account users. The exchange has announced agreements that it has made with international investment funds that will support the expansion of its global operations.
Ironically, the ban of Bitcoin and cryptocurrency activities in China seems to be turning out as a positive development for the industry. Before this time, most of the cryptocurrency activities were concentrated in China, including exchange services and mining operations. In the wake of the ban, the industry has become more decentralized, leading to a more globalized marketplace.
Apart from cryptocurrency exchanges that are making their way out of China, cryptocurrency miners also did the same, leading to an initial drop in the global Bitcoin mining hashrate. As the relocation of miners is nearing completion, the hashrate has recovered, with most of the miners reactivating their machines from different parts of the world.
From the perspective of Bitcoin and cryptocurrency prices, many users believe that the sell-off caused by the exit of exchanges will soon be over, especially as the December 31st, 2021 deadline approaches. Fans of cryptocurrency believe that at the end of the deadline, the selling pressure will ease, and the cryptocurrency market will continue its movement towards price discovery as we enter into the year 2022.