On May 31, Chinese Bitcoin and cryptocurrency news source cnLedger posted on it’s Twitter account reporting that OKCoin, China’s largest cryptocurrency exchange has resumed Bitcoin withdrawals.
Apart from OkCoin, Huobi another exchange in China resumed withdrawals.
Why was withdrawals suspended?
Back in February, OkCoin and Huobi, the two largest cryptocurrency exchanges in China, were flagged by the Chinese Central Bank, People’s Bank of China for operating an exchange without appropriate Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.
As a result, the two exchanges were ordered to suspend Bitcoin withdrawals until future notice. Also they were asked to implement KYC and AML systems that is required by country’s financial regulations.
This caused the Bitcoin demand to decrease in China. Traders were not participating anymore. From February to May, Bitcoin was traded at a substantially lower prices as compared to other Asian markets like Japan, India, South Korea. As traders could not withdraw Bitcoin and could not enjoy increase in prices, the demand for the cryptocurrency decreased and the traders shifted from exchanges to Over-The-Counter (OTC) markets such as LocalBitcoins.com
Experts says, as demand for Bitcoin in China decreased, it was also reflected in Bitcoin prices globally. And as now the withdrawals have been resumed, traders interest will rise again and thus may lead to fluctuation of Bitcoin prices.
Effects of resume of Bitcoin Withdrawals
As on May 31, Chinese Exchanges resumed withdrawals, the markets started to recover. The interest of traders spiked. On the time of publishing this article, Bitcoin’s global trading volume was third highest on OKCoin. Around $58,917,500 was the volume of Bitcoin trading on OkCoin at a prices of $2424.
There can be two scenarios:
->The rising interest may increase the demand for Bitcoins in China and as a result prices may increase. The recovery of the Chinese cryptocurrency exchange market is a positive sign of growth and recovery for the global market.
->On the other hand, as withdrawal are resumed and it was suspended since February this year, prices of Bitcoin has increased significantly since then. Traders may book their profits as their Bitcoin value would have surely been increased. If traders in China starts selling their Bitcoins to book profits, prices may drop.
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