Pan Gongsheng, vice governor of the People's Bank of China, told Sina that Bitcoin will decline in the long run.
"As Keynes taught us," the market can remain irrational longer than you can remain solvent. "There remains only one thing to do: sit down by the river and see the body of Bitcoin someday."
He further pointed out that the PBoC and the local Chinese authorities have made the right decision to suspend the cryptocurrency trading. Gongsheng said:
"If we had not stopped Bitcoin trade and repressed the ICOs several months ago, if China still accounted for more than 80% of global Bitcoin trade and ICO fundraising … Thinking of this question frightens me. "
The Chinese market has never been so important
The figure of 90 % of the global Bitcoin market mentioned by Gongsheng has been refuted by many analysts, investors and researchers in the cryptocurrency industry since last year, and for many years the foreign exchange market and Chinese trading platforms Bitcoin used a free trading system.All transactions were completely free, no cost at all
A crucial problem with the no-cost exchanges is their vulnerability to the commercial this bot and wash, which can lead to large inflated volumes. Therefore, the actual trading volume of a market with no cost exchanges is likely to be a fraction of what it seems.
In December 2016, the PBoC has asked all Chinese trading platforms and exchanges to eliminate zero-cost trade. Almost immediately, the supposed 90 percent market share of Bitcoin in the Chinese market dropped to seven percent. China has never been the biggest Bitcoin market, but the fifth largest market behind Japan, the United States, South Korea and Europe.
Moreover, if China accounted for a significant portion of the global Bitcoin exchange market, its crackdown on the cryptocurrency trade would have had a greater impact on the price of Bitcoin. However, since the ban on cryptocurrency trading by China, Bitcoin has risen from $ 5,000 to $ 11,665
<img alt=" Bitcoin Price Trend "src =" https: // cointelegraph.com/storage/uploads/view/124a2ab22b584f68f32d5ddc432e1f79 .png "title =" Bitcoin Price Trend "/> BitcoinPriceTrend_Cointelegraph_12.5.2017
The demand for Bitcoin in China is increasing
Like Leonhard Weese, HK Bitcoin Association founder and technology columnist noted, Major Cryptocurrency Exchanges in China Migrated to Hong Kong Bitcoin Market Following Chinese Government Crime Suppression
Weese revealed that Huobi, OKCoin, BTCC (which operate as Huobi Pro) and OKEx now account for 7% of the global market.In China, investors buy Bitcoin with a high premium of about eight percent. Most investors use offshore bank accounts to trade in Hong Kong:
"In Hong Kong, four dedicated OTC trading offices, Gatecoin, Octagon Strategy, Circle Trading and Genesis Block are competing for orders that can range from 1 to 10,000 BTC. "