Bitcoin Price Recovers to $2,400 as Chinese Exchanges Resume Withdrawals
China’s three largest bitcoin exchanges officially resumed withdrawals. As a result, bitcoin price recovered to $2,400 and market stabilized.
On May 31, OKCoin, the largest Bitcoin exchange on the Chinese exchange market with over 34 percent market share, officially resumed withdrawals for its traders. Huobi and BTCC, the second and third largest Bitcoin exchanges in China, followed, resuming withdrawals for all users.
Almost immediately after the resumption of withdrawals by the big three exchanges within the Chinese Bitcoin exchange market, Bitcoin price surged, recovering back into the $2,400 region. On a weekly basis, Bitcoin price has recorded a three percent gain, recovering from its previous market correction which led to a $600 decline from $2,500 to $1,900.
Withdrawal was not approved by PBoC
An interesting aspect of the recent resumption of withdrawals of the big three Chinese Bitcoin exchanges is that the withdrawal wasn’t ordered, requested or approved by the People’s Bank of China (PBoC), the central bank of the country.
According to local sources including cnLedger, Huobi, BTCC and OKCoin came to a consensus in regard to their anti-money laundering (AML) and know your customer (KYC) systems update and decided to open withdrawals for all of their users.
Before the interruption and on-site inspection carried out by the PBoC, the Chinese Bitcoin exchange market accounted for a substantially large market share of the global Bitcoin exchange market. At one point, it was the largest Bitcoin exchange market ahead of the US.
The resumption of withdrawals by the three exchanges allowed the Chinese Bitcoin exchange market to recover and stabilize in a relatively short period of time, which led to a rapid rise in the demand for Bitcoin from local traders and users.
Coincidentally, the trading volume and market share of the Japanese Bitcoin exchange market suddenly dropped and the case that Chinese traders were purchasing Bitcoin via Japanese exchanges and over-the-counter (OTC) markets can also be made.
Bitcoin price has sustained its momentum for three straight days, remaining and stabilizing in the $2,400 region. Currently, at the time of writing, Bitcoin price is around $2,425.
New regulatory frameworks and AML/KYC requirements
In June, the PBoC is expected to introduce new regulatory frameworks and AML/KYC requirements for Bitcoin exchanges and investors. Meanwhile, PBoC officials including Yao Qian, the head of Digital Currency Research Institute, are looking closely into both Bitcoin and other cryptocurrencies such as Ethereum and ICO tokens.
Qian also noted that the PBoC and the Chinese government intend to regulate ICOs in the near future. Whether China’s future roll-out of regulations on ICOs means taxation on investment or approval of projects by the government remains unclear. Qian and the PBoC also emphasized that Bitcoin is not a currency based on the criteria established by the Chinese government and will likely be considered as a digital commodity.
“Yao Qian, head of Digital Currency Research Institute at PBoC: Bitcoin does not fulfil the criteria of a currency; will soon regulate ICOs,” cnLedger reported.