Two months ago, I wrote a post about Bitcoin and all the Chinese Investors. Specifically, I was concerned about:
- The fact that 94% of all Bitcoin trades were taking place on Chinese exchanges;
- The fact that China has exchange controls – which could make it difficult to liquidate your Bitcoins in the case of, say, a Bitcoin sell-off; and
- Oh, well, the fact that Chinese investors have a history of speculative bubbles (even over garlic futures, if you can believe).
Here’s a graph from data.bitcoinity.org, showing all the Bitcoin trades for the last 30 days:
The top four exchanges on that list are all based in China. I make that 99.15% of all trading activity since November 5th.
Then consider this:
That’s the Chinese Yuan with 99.03% of the market share in Bitcoin trades.
I’m not really sure what to tell you here.
But I think we can safely say that Bitcoin is now effectively Chinese.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.
Oscar December 8, 2016 at 10:42
You are comparing apples with oranges. Chinese exchanges don’t havs any fees to trade so people do massive volume. There has long been speculation the volume is fakeReply
Jayson December 12, 2016 at 10:43
Hey there! So I don’t think that calling something ‘apples and oranges’ is a valid argument, neither is calling something ‘fake’. Perhaps you could explain your criticism a bit more?
Also, on the fake data front – even if there are some inconsistencies in the data, there is still directionality. Previously, US dollar trades dominated – now, yuan trades dominate. Previously, other exchanges took more of the bitcoin trade -now, it is the above 3 big players. I haven’t seen many commentators dispute that?Reply