The narrative of the correlation of Bitcoin’s growth to the rising tension between the US and China has been flourishing. Moreover, the assumption that the Chinese are increasing the buying pressure is also significant. However, Dovey Wan, a crypto-analyst, who shared her insights on this rhetoric, has countered this opinion.
According to Wan, “the actual amount flow into it due to trade war tension ( a real SoV purpose) vs. ppl speculate it, is tiny.”
She highlighted the fact that a negative premium on major Chinese Exchanges like Huobi, Okex, and Gate.io does not indicate a bullish market. She tweeted,
“Chinese buying up Bitcoin” is a VERY dubious narrative IMO
1. Bitcoin is trading at a negative premium in Chinese centric exchanges like Huobi and Okex
2. RMB denominated OTC price is now at 1% premium, within its normal range since the bull”
Moreover, the volume of trading data from localbitcoins in China is also consistent in the past couple of months. It is no-where comparable to the size during the 2017 bull market, but higher than in 2016. Nevertheless, no significant spike has been witnessed in the volume recently, which is expected from a bull market.
Dovey Wan also mentioned that the capital from the rest of the world is much higher than in China. She tweeted,
“I personally think the overall global financial uncertainty does help push up the market, but capital might come from the non-Chinese side more than the Chinese side.”
The top five cryptocurrency exchanges in the world also do not include the popular Chinese Exchanges. Coinbase, Kraken, and Bitstamp are based in the US. While all of these serve international clients as well, the Chinese link seems to be missing.
Notably, Bithumb is at number five on the list. Hence, there is a chance that Korean trading volume is massive as well.
Last but not least, Wan also commented on Bitcoin being referred to as a safe haven by notable crypto enthusiasts. While Bitcoin’s volume was reasonably consistent in China, Gold buying saw a spike in volume. She said,
Gold, on the other hand, saw a real spike in volume and prices from the CNY denominated trading pair
The global presence of Bitcoin with a lack of credible volume data from all the countries or Exchanges make it challenging to analyze the source of capital inflow. Nevertheless, the fact that the world’s largest economies are at loggerheads, does bring considerable attention to them.
Do you think that buying Bitcoin is more a global phenomenon? Please share your views with us.