Bitcoin is moving closer to the $3,000 region after establishing a new all-time high price at $2,933. The global bitcoin exchange market has stabilized significantly over the past few weeks as the big three Chinese exchanges BTCC, Huobi and OKCoin resumed withdrawals for users.
Prior to the resumption of withdrawals by leading Chinese bitcoin exchanges, bitcoin was being traded in the Chinese bitcoin exchange market at a price around 20 percent lower than that of the US, Japan and South Korean bitcoin exchange markets.
CCN previously reported that Chinese users moved to over-the-counter (OTC) markets such as LocalBitcoins to purchase bitcoin to avoid withdrawal suspension set by the People’s Bank of China on major Chinese exchanges. Some analysts suggested that Chinese bitcoin exchange users migrated to the Japanese exchange market to trade bitcoin.
The latter theory explains the sudden decline of the trading volume of the Japanese bitcoin exchange market as Chinese exchange resumed withdrawals and market stabilized. Almost immediately after Huobi, OKCoin and BTCC enabled withdrawals, Japan fell behind South Korea, the third largest bitcoin exchange market, after being the dominant exchange market for six straight months.
No More Premiums For South Korean and Japanese Traders
A more important aspect to consider in the recent change of the global bitcoin exchange market and ecosystem is that the high premium rates demonstrated by Japan and South Korea dematerialized.
On May 25, CryptoCoinsNews revealed that bitcoin price surpassed $3,800 on major South Korean bitcoin exchanges due to rising demand. A few days later, bitcoin price entered the $4,000 region within the South Korean bitcoin exchange market, demonstrating a $1,200 premium over other markets such as the US, Japan and China.
Tuur Demeester, prominent bitcoin trader and Adamant Research editor-in-chief, stated that the chief information officer of Korbit, the South Korean bitcoin exchange market’s second-largest bitcoin exchange, said in an interview that the premium exists due to the country’s strict capital controls.
In South Korea, it is virtually impossible to move more than $10,000 without being flagged by the country’s anti-money laundering (AML) and Know Your Customer (KYC) systems. Users and traders are requested to explain the source of funds and the purpose of transaction with hard evidence and carry out strict KYC procedures such as face-to-face interviews, submission of bank documents and proof of identity.
“Talked to the chief information officer of [the South Korean exchange market’s] 2nd largest exchange, says that capital controls are making price arbitrage difficult,” said Demeester.
In the past two weeks, as the Chinese market stabilized and officially became the second-largest bitcoin exchange market, other markets stabilized as well. The South Korean and Japanese bitcoin exchange markets are no longer demonstrating high premiums over the US market.
Link to full article - https://www.cryptocoinsnews.com/bitcoin-is-no-bubble-in-reaching-3000/
Topic: [2017-06-07] Bitcoin is No Bubble in Climb to $3,000 (Read 2247 times)
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