For one of the first times ever, Bitcoin is trading at a premium on Chinese OTC trading platforms.
China is slowly but surely recovering from the coronavirus — and now it looks like the country is also leading the Bitcoin buying during this bearish period for the cryptocurrency market.
China Buys Bitcoin at a Premium
Dovey Wan (@DoveyWan) is reporting that China is purchasing Bitcoin at above-average prices. The rare sighting is a new development that may indicate trends in the greater market are changing.
On over-the-counter trading platforms like Huobi OTC, OKEx OTC, and LocalBitcoins, BTC is trading for significantly higher than other exchanges. For example, the average price on Huobi OTC for the past 24-hours was around ¥39541 ($5,638). The price of Bitcoin at the time of publishing is around $4,725.
Could this be part of a ‘new paradigm?’ As China recovers from the coronavirus epidemic and the rest of the world struggles, we could see major slippages between cryptocurrency markets. China is, for now, leading the way and exhibiting high demands for the leading cryptocurrency.
Some are speculating that this is evidence that Bitcoin has hit its floor. However, Bitcoin is still down -13% on the day and looks to be a falling knife.
Although likely not the bottom for the cryptocurrency market, this development may further cement Asia’s dominance over the blockchain industry.
More Market Volatility Ahead
With U.S. futures posting -5% before the bell opens, the week ahead looks like it will just be volatile as the last. Last week, the market flipped from all-time highs to bearish in just 16 days — a new record. The -50% drop on Thursday for much of the cryptocurrency market has the potential to scare away many investors permanently, with Bitcoin further slipping downward today.
Although some maintain this is the time to buy, this upcoming week may push us down further.
As of now, China is in the strongest position to rebound after settling the coronavirus crisis in their own country. We will have to see whether these premium prices hold and whether they’re indicative of a new trend. Let’s not forget that China has committed itself to blockchain technology as part of its ‘critical digital infrastructure.’ So, there is a voracious appetite for cryptocurrencies in the country if the ruling party allows such activities.