Bitcoin still on the rise, despite shuttered Chinese exchanges

儘管中國證交所關閉，比特幣仍在上漲

Safety nets appear in HK, and over-the-counter trades boom in China


TAIPEI (Taiwan News) -- The Bitcoin market in China is a good example of just how confusing things can be regarding crypto-currencies in the digital age. In early September the PRC announced that in order cut down on illegal activity, all crypto-currency exchanges would be closed.

But then in mid-October before the 19th People's Congress began, there was some speculation that trading in digital crypto-currencies might have remained legal.

In fact, VICE reported that the value of Bitcoin may have continued climbing to an all-time high, simply because of the rumor that China 'might' allow the crypto-currency trading to continue.

But it was not to be. Instead, all of the Bitcoin exchanges within mainland China were essentially mortared up with the rest of the Great Fire Wall. However, it had been rumored that the PRC was intending to shut down the bitcoin trading posts as early as mid-September.

Presumably, investors in the cyber currency had plenty of time to shift their assets to exchange sites to servers outside of the PRC. On Nov. 2, Forbes reported that Bitcoin trading in China was officially dead, after the last crypto-currency exchange was shuttered.

On Oct. 31, two bitcoin exchanges in Hong Kong, Okex and Huobi Pro, both with now closed parent companies in Beijing, released statements that they would be shifting their business platforms to allow peer-to-peer transactions that would also support trades in fiat currency



Chinese Yuan (Wikimedia Commons)

Considering what a massive market mainland China was for Bitcoin, these two exchanges are stepping in to fill the necessary role of a safety net. With the peer-to-peer options, Chinese bitcoin investors can use OKex and HuobiPro to either cash in on their gains, or shift funds until more stable exchanges can be found abroad.

Realistically, some of the largest bitcoin investors in China are probably party members themselves. Allowing the Hong Kong based exchanges to operate in this manner is probably a temporary measure that the government will allow for the time being.

The popular digital currency news site CoinDesk reports that Lennex Lai, the financial market director of OKex said that the company has received over 8,000 new applications since the new service was launched on Nov. 1.

The site also reports that Huobi is preparing to open a currency exchange platform based in South Korea.

Chinese authorities are now busily monitoring the booming over-the-counter trades that are happening all over China as people seek to secure their investments. Bitcoin.com reports that over 680 billion Yuan, or over 103 million USD have been traded in OTC purchases over the last week of October.

Forbes reported on the Nov. 6 that Bitcoin's value has continued to rise even after the China shut down, with one bitcoin now valued at over USD$7,000 .

In the case of bitcoin, it seems that national boundaries, be they geographic or digital, are not going not going to stop the exchange of a highly valued crypto-currency. The market gets what it wants, and for now Chinese investors in bitcoin have their safety net, and a clearly lit exit sign in Hong Kong.