Throughout the past two weeks, the cryptocurrency community’s anticipation of the Chinese government’s nationwide ban on bitcoin exchanges led to a major correction in the price of bitcoin and most of the cryptocurrencies in the market. Bitcoin price dropped from $4,100 to $2,900 within a…
Throughout the past two weeks, the cryptocurrency community’s anticipation of the Chinese government’s nationwide ban on bitcoin exchanges led to a major correction in the price of bitcoin and most of the cryptocurrencies in the market.
Bitcoin price dropped from $4,100 to $2,900 within a period of three days, as major Chinese exchanges including BTCC announced their closure. But, as Chinese financial regulators finalized the nationwide ban on exchanges by providing leeway to OKCoin and Huobi, the two largest exchanges in China, to operate until the end of October, bitcoin price rebounded from $2,900 to $3,850.
Over the past two days, after its initial surge, bitcoin price has remained relatively stable at around $3,580. Earlier today, bitcoin price recorded a minor gain of $100, increasing by nearly 3 percent.
It is likely that many traders were anticipating to purchase the dip, considering the $2,900 as the lowest level bitcoin price could fall to. Bitcoin developer Andrew DeSantis and prominent bitcoin trader IamNomad further revealed that the bank accounts of JPMorgan Securities Ltd. also purchased bitcoin through Swedish bitcoin exchange traded note provider XBT Provider. Analysts including Tone Vays noted that JPMorgan clients most likely purchased shares of BItcoin XBT using JPMorgan’s custodian accounts.
Either way, casual investors, professional and institutional traders have started to purchase bitcoin again almost immediately after the closure of Chinese bitcoin exchanges was finalized. The fact that JPMorgan clients purchased massive amounts of bitcoin despite the strong condemnation of JPMorgan CEO Jamie Dimon on bitcoin also increased the confidence of traders over the bitcoin market.
Regardless of the exit of Chinese exchanges and the country’s cryptocurrency exchange market, many experts expressed their optimism toward bitcoin. Some analysts including RT’s Keiser Report host Max Keiser reaffirmed his short-term bitcoin price target of $10,000. More importantly, Keiser explained that the Japanese market will likely overtake China in the upcoming months, as China continues to isolate itself from the global bitcoin industry.
“If China was trying to show strength with #Bitcoin ban, they did the opposite,” said Keiser. China and Japan about to start a crypto currency war over bitcoin. China’s got cheaper energy, but Japan has more open society. Japan for the win.”
Keiser has been accurate with his depiction of the short-term trend of bitcoin. Most of the traders from China have already moved to the Japanese bitcoin exchange market, as Keiser predicted. Today, Japan officially became the largest bitcoin exchange market in the world, overtaking US with a staggering 50.8 percent market share of the global bitcoin exchange market. Meanwhile, the trading volume of the Chinese bitcoin exchange market decreased from 15 percent to 6.5 percent, despite the ongoing operations of OKCoin and Huobi.
As the global bitcoin exchange market stabilizes and recovers from the ban on Chinese exchanges, and as traders move from the Chinese market to other neighboring markets such as Japan and South Korea, it is highly likely that bitcoin price will lead yet another upward momentum.Additionally, leading Chinese exchanges including BTCC have noted earlier this week that they intend to continue their international operations while collaborating with Chinese financial regulators to potentially restore the Chinese cryptocurrency exchange market.
Featured image from Shutterstock.