Regardless of the Chinese government’s plan to extend the nationwide bitcoin exchange ban to over-the-counter (OTC) markets, bitcoin trading activity is continuously increasing in the region.
Trading activity is increasing at a fast rate. OTC and P2P bitcoin trading data providers such as Coin Dance have shown that LocalBitcoins weekly trading volumes have surged significantly after the finalization of nationwide bitcoin exchange ban. Throughout the past few days, weekly trading volumes on LocalBitcoins increased, with the platform recording a $74 million trading volume this week.
A large number of traders have moved from the Chinese bitcoin exchange market to the Japanese cryptocurrency market. The decision of the Chinese government to isolate the country from the global bitcoin trading market will only lead to existing traders leaving to nearby markets such as Japan, Hong Kong and South Korea. Traders that struggle to deal with Know Your Customer (KYC) and Anti-Money Laundering (AML) policies in Japan and South Korea will simply utilize regional OTC platforms like Richfund.
Most Chinese exchanges and bitcoin service providers still remain optimistic that the Chinese government is strictly regulating the bitcoin market with the idea of introducing a licensing program for bitcoin trading platforms in the future, to establish a more stable and regulated bitcoin exchange market.