LocalBitcoins China volume sets another record!
LocalBitcoins China volume sets another record! What’s better than last week’s LocalBitcoins record in China? This week’s Bitcoin record! cnLedger 6M CNY (or 7,000 BTC) traded.
Chinese Bitcoin traders have inundated LocalBitcoins to convert their Yuan after major Chinese exchanges halted withdrawals last week.
Following warnings about adhering to strict AML/KYC regulations by the People’s Bank of China, exchanges such as BTCC, Huobi and Okcoin stopped letting customers withdraw Bitcoin.
“From now on, Huobi stops the withdrawal for Bitcoin and litecoin,” Huobi’s latest announcement stated Feb. 9. It is unknown when full functionality will return and under what rules.
As a result, former Chinese customers appear to be using LocalBitcoins as a way of continuing to trade. This week saw an all-time high in activity for the site’s China market, with almost 6.6 mln yuan traded according to data from Coin Dance.
By comparison, the previous week showed just 1.4 mln yuan exchanged.
he phenomenon is likely to be temporary given LocalBitcoins rates are less advantageous than those of exchanges. The increased usage also means spreads widen and average prices increase, heightening losses for desperate traders.
As of Monday, the cheapest available price for BTC purchase is still over 7100 yuan.
Compared to the week before, the volume on LocalBitcoins China has more than quadrupled. It is anybody’s guess who is buying up so many bitcoins right now, although it is safe to assume some of the exchange traders are keeping a close eye on this market. Peer-to-peer bitcoin trading is being more than viable alternative to using exchanges, albeit it may be a bit more difficult to find bulk sellers. Regardless of where the volume comes from, over 6.5m Yuan worth of BTC changed hands through LocalBitcoins last week.
It is evident the Chinese demand for bitcoin is all but satisfied right now. With local exchanges reintroducing trading fees and delaying bitcoin withdrawals, a lot of traders are forced to look for other solutions. Considering how there are only three bitcoin ATMs in China right now, the options are rather limited for most traders. Using LocalBitcoins is somewhat of a last resort, even though it can generate enough volume to keep the Chinese BTC market alive and kicking.