ForexMinute.com – The rumor, saying that Chinese Central Bank PBOC has ordered a permanent closing of the conventional bank accounts of the local Bitcoin Exchanges, had indeed caused major havoc last week in the cryptocurrency markets, sending the multiple coins’ values to their months’ low. But with the April 15 deadline passing like a peaceful bee, many of the experts are left wondering: Was there actually a need for Chinese exchanges to change operations in the very first place?
Last week, major Bitcoin exchanges in China, including the likes of Huobi and BTC Trade, have confirmed to have received informal requests from their respective banks, saying that they would have to close down their trading accounts by the aforementioned deadline. Meanwhile, another renowned cryptocurrency exchange OKCoin also announced to suspend account recharges via their merchant bank account – a step that was said to be taken under the pressure of alleged PBOC ruling.
However, there was only BTC China that maintained its stand throughout the dramatic episode between cryptocurrency exchanges and Chinese government. Disregarding the alleged ruling by stating that they have not received any official statement, BTC China kept its services operational throughout the week and didn’t take any major decision like its counterparts.
Maybe because the exchange had understood the turbulences created by the Chinese Central Bank in past. The history of Bitcoin in China is indeed unstable, with PBOC already being a part of rumors like “banning Bitcoin in China”, and now “closing ties between Bitcoin exchanges and conventional banks.”
Bobby Lee, the CEO of BTC China, told media that he will only act when there will be a formal notification from the central bank regarding the “rumored” ruling. The man kept the exchange’s operations as usual last week, with customers loading funds through bank deposits, or by using vouchers (Vouchers were introduced by BTC China in response to the first banking scare by PBOC last December)
“Our situation has not changed. We have been talking to banks, with whom we have a relationship, and so far we have not received any notification that we cannot keep doing business with them,” said Lee in a statement, while ensuring clients that their funds are well protected. He even offered solutions in case the banks conclude their relationships with BTC China. He ensured that the exchange will simply move funds to another account in case any ruling will affect BTC China.
And yet, BTC China’s services remain ineffective of the entire fiasco that took place last week.
What We Analyzed?
Bitcoin-is-not-banned-in-China is the first thing we analyzed and wondered if the whole drama was going to affect the BTC prices against other fiat currencies. Major traders could simply buy Bitcoin, and even other altcoins like Litecoin, Dogecoin, etc. at lower values. So in a way, traders who have invested during last week’s turmoil have indeed made greater profits this week, as Bitcoin prices have plunged 40% in the last 48 hours.
We also analyzed that the funds were never in danger. The noise-makers simply made a chaotic scenario among investors that sent shivers throughout the market. Chinese exchanges normally work with multiple bank accounts onshore and offshore.
Lastly, we believe it was just a gimmick. Until this date, there has not been a decision or statement by the People’s Bank of China, and all measures taken by the Chinese banks were only precautionary.
To contact the reporter of the story: Yashu Gola at firstname.lastname@example.org
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