Chinese Traders Pay Extra for Bitcoin Through OTC Desks Amid Crypto Market Surge
Over-the-counter traders in China are paying more for stablecoins than their USD counterparts as demand peaks for BTC.
Since China formally banned cryptocurrency trading in 2017, investors have had few options. Purchasing stablecoins such as Tether (USDT) via over-the-counter (OTC) services and converting them to other cryptocurrencies has become the principal method, cnLedger noted.
Now, in the wake of a bullish week for Bitcoin which saw BTC/USD advance by over $1,000, prices for those OTC services have steadily risen in CNY terms, marking an increase in demand.
“Chinese markets reveal strong buys,” the resource summarized. The tweet stated:
“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 buoyant mood among Chinese investors contrasts with the ongoing clampdown on cryptocurrency-related activities in the country. As Cointelegraph reported, this has extended to anything construed as propaganda, while associated instruments such as initial coin offerings (ICOs) are also outlawed.
By contrast, authorities continue to advocate the development of blockchain technology, both within the state and private sector. Last week, Beijing approved almost 200 firms as part of new plans to register blockchain service providers.