Bitcoin Trading Flows and Market Dominance in China

This week, for the first time Beijing-based exchange OKCoin topped daily dollar trades. This has brought China to attention as the most active Bitcoin trading market, again.

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Only a few weeks ago, Shanghai-based exchange BTC China declared that yuan trades include more than 70% of the trading volume.

As the many different Chinese exchanges fight for the top position in global trading volumes, now the yuan trading is 3 times greater than the dollar trades.

According to analysts and exchange operators, the country’s dominance in bitcoin trading is mainly because of macro factors like investment environment.

Raffael Danielli of Matlab Trading tracks digital currency trading in his blog. He took a macro view of the country’s dominance in the bitcoin markets and said that if more volume growth is seen from Asia than the West, it would not be surprising. It reflects the existing disparity in economic growth.

Until 2012, Bitcoin trading volume was controlled by the US dollar trading. However, the dollar dominance began to slip from last October. On the other hand, yuan-bitcoin trades rose.

However, by the month of March, the yuan trades witnessed a decisive climb away from the dollar trades.

Chief technology officer of OKCoin, Changpeng Zhao, echoed the macro theme suggested by Danielli, and stated that the wide range of assets available for retail investors is limited in China.

Arthur Hayes of Hong Kong based BitMEX, a crypto currency derivatives exchange, agreed that the Chinese trading volumes should outdo the trading of the rest of the world.

He said that China’s restricted investment environment, larger population and more Internet-friendly banking system are good reasons for greater bitcoin trading in the country.

He cautioned too saying that the trading volume data might overstate China’s dominance.

He agreed that China is definitely number one, but that quantifying its lead is not easy. But he is sure that that China trades more bitcoin compare to any other nation.

Zhao from OKCoin insisted that the exchange provided accurate data while founder Bobby Lee of BTC China did not comment on the matter.

The chief executive Huobi’s, Leon Li, suggested something similar to Hayes. Both thinks that users should place a 100 BTC market-sell order on different exchanges to be sure about the market depth.

Both OKCoin and Huobi are now leading companies in China.

The amount of trading activity on exchanges like Bitstamp and BTC-e outside China has reduced steadily since last autumn.

Huobi toppled BTC China and overtook the share of trades in December. Its trades rocketed to 67% January.

OKCoin Surpassed Huobi this year, and it is now the trading volume leader.

OKCoin trades make up 30% of the total volume while Huobi’s trades accounts for only around 20%. BTC China is recovering quickly too.

Each of these exchanges jostles for the top position and come up with innovative business tactics in the process. This fight for leadership actually helps the Bitcoin Industry in China grow. Today Bitcoin Industry in China is among the largest ones.