After the recent market rally led by Bitcoin, Chinese crypto traders are making a comeback into the space. However, investors are having to pay an additional 3% on over-the-counter or OTC platforms [like Huobi] for the stablecoin Tether [USDT] to avoid a blanket ban on crypto-trading.
The premium paid by investors and traders in the region has become increasingly widespread since the prohibition of virtual currency trading.
A Chinese news outlet, cnLedger, revealed on Twitter the cause of USDT premiums surging post the ICO and cryptocurrency trading ban in 2017. It revealed that the most “convenient way” to acquire a digital asset in the country was to buy stablecoins like USDT [1 USDT = 7 CNY] via OTC or over-the-counter forums. Following the purchase, users can convert it to a desired digital coin in any cryptocurrency exchange, cnLedger continued.
The entire crypto market was green after being supported by the Bitcoin rally. This prompted Chinese investors to return to the space and trade, in the middle of a regulatory clampdown in the country. Commenting on the market, cnLedger tweeted,
“Chinese markets reveal strong buys. OTC (Over-The-Counter) trades, the almost only way to buy bitcoin with fiat in China, showing considerable $ premium (1 USDT = 7 CNY) over the official rate of 1 USD = 6.7 CNY.”
The Chinese crypto-dedicated news service also revealed that Bitcoin was the most searched keyword on Baidu [Google’s equivalent in China]. A Chinese court issued a ruling in late 2018 stating that owning and transferring Bitcoin in the country did not fall under the prohibitory law.
According to Coinlib, money flow from Chinese Yuan [CNY] to Bitcoin [BTC] was $124.45 million and $71.08 million for Ethereum [ETH], over the past 24 hours.
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