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The reaction of Bitcoin market to the recent developments in the Chinese cryptocurrency market was quite the opposite to the expectations. As the Chinese Bitcoin exchange platforms make changes to their offerings following the People’s Bank of China’s orders, Bitcoin price continues to show positive growth.
The demand and supply in the Chinese market have been known to impact the global cryptocurrency prices. The Chinese central bank’s crackdown on the country’s Bitcoin platforms following an inspection was expected to bring down the cryptocurrency price due to regulatory uncertainty. Even though there was a sudden dip in Bitcoin’s price a few days ago, it soon recovered to previously held levels.
On Thursday, following BTCC’s announcement about halting withdrawals till March 15, 2017, the digital currency’s price showed further improvement. This has led to an assumption that the investors have become sensitized to the actions of Chinese authorities and cryptocurrency platforms. A recent article on a business media site quotes ARK Invest’s Chris Burniske describing the situation by saying,
“The market is kind of numb. It’s priced in this information and it’s not concerned.”
The investors are less worried about the developments as the former governor of the People’s Bank of China stated that the country’s regulatory authorities are not going to ban Bitcoin. Bitcoin will continue to exist in China.
Also, by freezing Bitcoin withdrawals, the Chinese cryptocurrency exchange platforms seem to have reduced the cryptocurrency’s liquidity in the market. It has, in turn, played a role in driving the digital currency’s price upwards. With the freeze on withdrawals set to continue at least until March 15, 2017, Bitcoin price is expected to strengthen further during this period.
The Chinese Bitcoin exchanges are currently in the process of deploying new AML and KYC compliance systems. Until the process is completed, people will only be able to deposit and withdraw fiat currencies.
Ref: MarketWatch | Image: NewsBTC