Chinese bitcoin market is far from over. Since China has banned fundraising through cryptocurrencies and ordered several bitcoin exchanges to shut down, though it cast a spell over the bitcoin industry, it is far from over. Bitcoin has rebounded and there is shift to the peer to peer exchange like Paxful where buyers and sellers get together and exchange bitcoins for gift cards.
Peer to peer exchanges are flourishing with a massive surge in transactions. People are using these exchanges as well as messenger apps. Cryptocurrency insiders say there are still initial coin offerings.
The crackdown has stopped the flow of less experienced investors though. Those who only read about bitcoin may decide it’s too risky an investment. But bitcoin enthusiasists see the privacy aspect, everything is done via QR code, and know the bottom line is that it’s very hard to track transaction and most users are using handles for names.
This has created a short term investment opportunity for investors with bitcoin in China trading at a discount to exchanges outside of China.
Many Chinese bitcoins users are turning to overseas exchanges. Paxful, as noted, has seen a surge in transactions. They are not alone. Other peer to peer exchanges are flourishing. It looks like bitcoin is here to stay for the moment and this might give some resilience to the cryptocurrency after the China ban.
Over 15 exchanges have announced closing their businesses by the end of September. This is in response to the Chinese government ordering ICOs to cease and cryptocurrencies to shut down.
Bitcoin in China is still trading at a discount to other foreign exchanges. Recently on the China market it was around $3600 compared to $4200 on the U.S. exchange.
The fact that bitcoin is still trading in China is showing that China doesn’t want to eliminate bitcoin but find a way to have some control over bitcoin industry. On the dark side, bitcoin is a great way to launder money without a trace, for example.