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Bitcoin Price is Rising Despite Drop in Volume

Despite the drop in trading volume due to the events in China, bitcoin price continues to climb, approaching $1000. This is a good sign for the cryptocurrency, showing the interest to it value even in the conditions when the volume of speculative trades is drastically reduced. The bitcoin is also used as a hedge against weakness of other currencies.

Bitcoin rallied 3.7% on Tuesday as the Trump team exchanged barbs with German Chancellor Angela Merkel over the weakness of the euro, closing the day near $955 a coin. Tuesday’s gains have carried over into Wednesday’s session with the cryptocurrency up close to 1% near $972. (Read the full article)

 

Bitcoin price chart
Bitcoin price is rising

As trading volume on Chinese exchanges plummeted due to elimination of margin trading and introduction of the exchange fees, part of the speculative volume was picked up by other exchanges outside China, some of them offering no fee trading.

To recap, up until recently, China-based exchanges BTCC, Huobi and OKCoin dominated the landscape in terms of volume (though these figures were long observed with skepticism). However, this reign was cut short earlier in January when the startups came under the scrutiny of the People’s Bank of China (PBOC), the country’s central bank.

The result has been a series of policy changes, the abrupt end to popular trading features like margin trading and a rapid decline in the volume at the three exchanges, developments that are now impacting the wider market.

In recent days, new no-fee exchanges are now ranking among the top 10 in volume, resulting in a bitcoin exchange leaderboard that looks markedly different than it did last week.

At first, no-fee exchanges such as BTC100 and CHBTC moved to the front of the pack in terms of trading volume, but this, too, is now shifting.

As of today, BTC100, a no-fee exchange, held the top spot with roughly 32,600 BTC worth of trading volume during the 24 hours through roughly 22:00 UTC, CoinMarketCap data shows.

XBTCe and Poloniex, which both charge trading fees, held second and third place with more than 17,100 BTC and less than 17,100 BTC, respectively. (Read the full article)

According to the new distribution of trading volume, 50% of trades are is performed perform in US dollars, with only 20% left to the Chinese exchanges. Compare it to about 90% of trading volume in yuan at the end of 2016. Meanwhile, China has no plan of banning the digital currency, but instead takes the path of its regulation and official adoption:

People’s Bank of China (PBoC) is officially launching a digital currency research institute on Jan. 29, one day after the celebration of the Chinese Lunar New Year.

In an interview with a national newspaper China Securities Journal earlier this week, PBoC department of technology director Li Wei revealed the plans of PBoC to actively examine and explore Blockchain technology.

Specifically, Wei stated that the central bank of China is interested in the ability of Blockchain technology to settle real-time transactions in a secure, cheap and efficient ecosystem of peer-to-peer users. (Read the full article)

Meanwhile, it has been reported, that at the current rate of bitcoin mining, 80% of 21 million BTC quota will be mined in one year, which means that only 4.2 million of bitcoins could be mind starting from 2018 to 2140 (122 years). If the sentiment towards bitcoin does not change, the shortage of bitcoins may lead the price of BTC to skyrocket. (Read the article)

See also:

Bitcoin Trading Volume Continues To Slide. Bitcoin Prices Are Steady.

Bitcoin Trading Volume Drops on Chinese Exchanges

No-Fee Trading is Stopped on Chinese Bitcoin Exchanges