Despite Beijing’s increasing crackdown on the crypto industry, there are still some signs of life in the People’s Republic of the Bitcoin network and OTC trading.
China stepped up its crackdown on cryptocurrencies last week to prevent any remaining digital asset-related activity within its borders. The regime specifically targets cryptocurrency transactions, but according to Cointelegraph research, the practice is nothing new, given at least 19 similar raids in the past decade.
Despite the recent move, there are still 135 active Bitcoin nodes in China, according to Bitrawr, a tool that measures nodes by geographic location. However, this is only 1.21% of the total of 11,262 Bitcoin nodes on the planet. There could be more if they run behind virtual private networks (VPNs) and / or use onion routing with Tor masking locations
Bitcoin nodes are the software that runs the log and contains all or part of the ledger with the history of the transaction data. Distributed and decentralized systems are specially designed to be difficult to shut down completely, so the regime may struggle to suppress some of these ultimate problems or those operating through Tor.
While volume numbers are hard to come by because of their opaque nature, over-the-counter (OTC) trading is also holding a foothold in China, as are currency pairs, according to various reports.
Local media company Wu Blockchain reported that the RMB / USDT pair, which is still offered by major exchanges like OKEx and Huobi, is trading at a premium. He noted that panic selling had subsided over the past week.
OKEx is currently offering 6.35 yuan for 1 USDT, with the actual exchange rate for a greenback being 6.47 according to XE.com.
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Peer-to-peer OTC transactions restrict the use of bank or spot markets on centralized exchanges – although many exchanges have an OTC desk involved. According to Coindance, the volume of trade in China has been relatively stable since early 2020, with around 7 million yuan (about $ 1 million) traded on Localbitcoins P2P platform every week.
Former CEO of China’s first cryptocurrency exchange, BTCC, Bobby Lee believes Beijing will target OTC counters in the next crackdown. Earlier this week, he said that OTC platforms operated by major exchanges would be closed or forced to ban Chinese users. In conversation with Bloomberg on September 29th, Lee Add:
“They really don’t want loopholes where people can use digital currencies to move assets overseas.”
This was followed by the prediction that the BTC market would see another FOMO rally that could push the price to $ 200,000.