Over the past week, the bitcoin price has fully recovered from the Chinese government’s nationwide ban on cryptocurrency exchanges. Earlier today, on October 2, the price of bitcoin surpassed $4,430, nearing the interim target of $5,000 by most analysts in the bitcoin sector.
Since September 22, bitcoin has demonstrated a rapid rate of recovery, rebounding from $3,500 to $4,430 in a span of less than two weeks. More to that, since September 22, the market cap of bitcoin has increased from $59 billion to $73 billion, as its daily trading volume surpassed the $1.2 billion mark once again.
US and Japan Makes Chinese Cryptocurrency Market Irrelevant
According to bitcoin market data providers including CryptoCompare, the majority of trading volumes from the Chinese cryptocurrency exchange market have moved to Japan, which has been able to secure its position as the largest bitcoin exchange market with over 54 percent in market share. At the time of reporting, the Japanese bitcoin exchange market is processing more than twice as much trades as the US market.
In an interview with CNBC, CryptoCompare founder and CEO Charles Hayter emphasized that the US and Japan have made the Chinese market irrelevant in the global cryptocurrency sector. Hayter explained:
“Japan and the U.S. have proven China is unnecessary for bitcoin to thrive. As various nation states pin their colours to the mast, a whole panoply of differing attitudes will be seen. This industry is mobile and it will come to roost in the most favourable jurisdictions.”
The rapid increase in the trading volumes of the Japanese bitcoin exchange market can be attributed to the Japanese government’s authorization and licensing of 11 bitcoin exchanges. Many of the leading cryptocurrency trading platform in the Japanese market were approved by the country’s financial regulator the Financial Services Agency (FSA). BitFlyer, the largest cryptocurrency exchange in Japan with over 800,000 users, was one of the 11 exchanges that were approved by Japan’s FSA.
Yuzo Kano, the CEO at BitFlyer, stated:
“Japan has been exploding with demand for both bitcoin trading as well as virtual currency services. The FSA’s approval for bitFlyer to operate as a Registered Virtual Currency Exchange, and the agency’s openness and forward thinking regulation could not come at a better time for the blockchain space.”
Uncertainty in SegWit2x Hard Fork, No Impact on Bitcoin Price
Historically, the imminence and contingency of controversial hard forks have led to the decline in the price of bitcoin. For instance, prior to the execution of the Bitcoin Cash hard fork, the price of bitcoin endured a minor correction, recording a $200 decrease from $2880 to $2680. While the actual hard fork of Bitcoin Cash had minimal impact on the price of bitcoin, it had negatively affected bitcoin since July, preventing it from recovering and sustaining its upward momentum.
But, the possibility of a SegWit2x hard fork in November has not been a major factor in the development of the bitcoin price, which would mean that the bitcoin traders, investors, and users are fairly certain that the SegWit2x hard fork will not occur. Many businesses have already pulled out of the SegWit2x agreement and at this juncture in which Segregated WItness (SegWit) is already demonstrating efficient scaling, SegWit2x is simply not necessary.
Last modified: March 4, 2021 5:00 PM