Chinese Crypto Whales Avoid Ban with Premium OTC Trading to Buy Bitcoin
According to CNLedger, a recognized source of China-related cryptocurrency news, the Chinese over-the-counter (OTC) market has revealed strong buys as of late, indicating an overall rise in demand for bitcoin.
1/ Chinese markets reveal strong buys. OTC (Over-The-Counter) trades, the almost only way to buy bitcoin with fiat in China, showing considerable $ premium (1 USDT = 7 CNY) over the official rate of 1 USD = 6.7 CNY. pic.twitter.com/bd0n0DGFVU
— cnLedger (@cnLedger) April 8, 2019
After the Chinese government banned bitcoin and cryptocurrency trading in September 2017, local publications including SCMP have reported that a relatively large number of bitcoin investors still actively traded the asset, circumventing restrictions through VPNs, stablecoins, and OTC markets.
High Demand For Bitcoin From Chinese Investors Shown by Stablecoin Premium
Based on official rates, currently, 1 USD is worth around 6.72 Chinese yuan (CNY).
On over-the-counter (OTC) trading platforms and Asia-based exchanges like Huobi, however, 1 USDT is being traded at around 7 CNY, with a 4 percent premium.
In China, due to the blanket ban imposed on cryptocurrency trading, the sole way for investors to buy or sell cryptocurrencies is either through peer-to-peer (P2P) or over-the-counter (OTC) markets.
Once investors acquire bitcoin or USDT through an OTC exchange, then investors can use VPN to trade on global cryptocurrency exchanges, engaging in crypto-to-crypto trades.
