There are still a handful of dangling Bitcoin nodes in China and OTC trading is still viable, but it may not be for long.
Despite Beijing’s growing crackdown on the cryptocurrency industry, there are still signs of life in the People’s Republic regarding the Bitcoin network and OTC trading.
China stepped up its crackdown on cryptocurrencies last week in an effort to suppress any remaining activity related to digital assets within its borders. The regime specifically targeted crypto transactions, but as Cointelegraph has studied, this action is not new with at least 19 similar crackdowns over the past decade.
Despite the latest move, there are still 135 Bitcoin nodes in operation in China according to Bitrawr data measuring nodes by geographic location. However, this is only 1.21% of the total 11,262 Bitcoin nodes spread across the planet. There may be more if they run behind virtual private networks (VPNs) and / or use onion routing with Tor hiding locations
Bitcoin nodes are the software that runs the protocol, containing the entire ledger or a segment of it containing a history of transaction data. Distributed and decentralized systems are specially designed to be difficult to shut down completely, so the regime may have a hard time shutting down these latest hiccups or those running on Tor.
Although volume is difficult to quantify due to its opaque nature, over-the-counter (OTC) trading also maintains a presence in China according to various reports, as does the local currency pair.
Local media Wu Blockchain reported that the RMB / USDT pair, which is still offered on major exchanges such as OKEx and Huobi, is trading at a higher price. He pointed to the panic selling last week, which has since subsided.
OKEx is currently offering 6.35 yuan for 1 USDT, while the real exchange rate for a dollar is 6.47 according to XE.com.
OTC transactions are peer-to-peer, avoiding the use of a bank or spot markets on centralized exchanges, although many exchanges have related OTC desks. According to Coindance, volumes in China have been relatively stable since the beginning of 2020, with around 7 million yuan (around $ 1 million) traded per week on the P2P platform Localbitcoins.
CNY local bitcoin volume – coin.dance
Former CEO of BTCC, China’s top crypto exchange Bobby Lee believes Beijing will target OTC offices in its next crackdown. Earlier this week, he said that OTC platforms operated by major exchanges would be closed or forced to exclude Chinese users. Speaking to Bloomberg on September 29, Lee added:
“They really don’t want loopholes where people can use digital currency as a vehicle to move assets abroad. “
He followed up with a prediction that the BTC markets should experience another FOMO rally that could send prices to $ 200,000.