Thursday, December 1, 2022

In China, the First OTC Bitcoin Trade Over 20,000 RMB

In China, the First OTC Bitcoin Trade Over 20,000 RMB

Maybe you were excited at $2,400 yesterday. Or even $2,600 later in the day. While all that was happening, a Chinese over-the-counter (OTC) exchange recorded its first 20,000+ RMB bitcoin trade. That’s about $2,900 USD.

Also read: Raoul Pal Ditches Bitcoin, Cites Diminishing Returns

The record trade of ¥20,107 happened at 4:06AM on 25th May (China time) on BitKan’s OTC exchange. It’s significant for two reasons: the high price, and the changing nature of bitcoin trading in China.

BitKan record price chart

Shortly after the first above-20,000 trade, the price dropped to around 16,000 RMB ($2,320) but has been rising since.

Over-the-counter trading means users trade directly with each other, rather than on an exchange. BitKan’s system has similarities to an exchange, offering a trading platform with charts — but it still matches individual sellers with individual buyers. They usually use electronic payments like WeChat or PayPal to move fiat funds, so users don’t have to be in the same physical location.

If you sell a bitcoin to a friend, that’s technically an over-the-counter trade. Some brokers can arrange such off-exchange trades worth millions of dollars. Reasons for trading OTC mainly include convenience, speed, privacy.

As mentioned here previously, a sizeable amount of China’s bitcoin trade is moving to OTC markets thanks to recent crackdowns on online, centralized exchanges.

BitKan’s platform now has over 500 traders, and a total 50,000 OTC exchange users.

Reasons for Surge in OTC and Other Trading

In a Chinese article recently, BitKan said this is also causing prices in OTC markets to soar.

“Because the major bitcoin exchange platforms have been banned from processing withdrawals by the Chinese supervision department, a lot of bitcoin traders have moved to OTC trading. Compared to the depression in spot market, the OTC price is rapidly rising at the same time. Because traders can buy actual bitcoins OTC.”

BitKan CEO Yang Liu added there were three main factors worldwide driving up the bitcoin price, whether on-exchange or off.

The WannaCry malware attacks are actually helping, by drawing attention to bitcoin and forcing many to buy. Since it first appeared, BitKan’s monthly new-user acquisition has risen tenfold.

New favorable regulation in both Japan and Australia are also helping. On the other hand, political instability in South Korea is also boosting price — and OTC trades.

The last factor is the new Bitcoin Scaling Agreement out of New York City this week. While bitcoin was definitely on the move before the agreement happened, the prospect of finally solving problems like 200,000 stuck transactions in May could bring money out of altcoins and back into bitcoin again.

Do you trade on exchanges or some other way? We’d like to hear your thoughts.

Images via Pixabay, BitKan

BitKan is a strategic partner of Bitsonline.

Bitsonline Email Newsletter