China Dominates Global Tether, Crypto Trading Trends
Previous research showed certain Western countries far in the lead as far as Bitcoin exchange transaction volume. More in-depth research, which includes China, finds that the Asian country is leading the way.
Until there’s some cataclysmic event, that changes the way everyone thinks about money, we won’t see the full scope of the blockchain applied to life.
It’s happened before, and it can happen again. Then the crypto chains that can and will accommodate masses of people will have the opportunity to do so.
This year, China has done more trading so far than it did in 2017. The remarkable increase means that incoming funds and liquidity are real – people are serious about getting into blockchain. All over the world. This is a necessary bi-product of having a prosperous blockchain economy: masses of people need to take part. The system needs utility. It should make things more convenient.
Chinese volume has suddenly dropped before.
One under-reported fact about increased blockchain usage is the increased cost to use them that results. It’s no joke when you’re spending $1 or $2 to send a single transaction. For people that routinely use cryptocurrency, this makes it more feasible to hold one coin but use another. For example, buy $100 each of Bitcoin and something like EOS or even Bitcoin Cash.
Bitcoin May Not Be The Only Answer
The latter two options will spend faster and cheaper, but the Bitcoin is likely to appreciate at some point. Whether the current prices are a good buy or not is never an easy decision to make. A short week ago, it would have seemed outlandish to suggest a drop by more than $300 was coming to Bitcoin. Now those who bought a week ago probably wish they waited. More coin for the same money, that’s the result of sudden bear crashes.
Demand for Tether in the United States is weak compared to China. The US makes up just 3% of the total volume of on-chain demand for Tether. Tether is one sure way to measure the size of a crypto market. By comparison, China sent billions in crypto, accounting for over half of the usage altogether.
At a minimum, Diar concludes that Tether activity in China and elsewhere seems legitimate.
“This similar character in the net balance of sent and received funds globally and across all regions suggests legitimate flows. There is no disparity or alternative behavior in the movement of Tethers sent to Chinese exchanges versus the transactions sent to regulated US-based trading venues.”
Beyond that, Diar believes that more volume may be real than fake. They make this conclusion on the basis that China sends and receives billions of Tether, which could account for the high volume across exchanges.
“But in consideration of the billions in Tethers moved on-chain in China that towers over US and world market transactional value, the estimate by Bitwise of 95% of cryptocurrency trading volume being fake is also likely to be far off the mark, possibly by magnitudes.”
Essentially, the argument is that since on-chain Tether transfers have gone up, transaction volume at various exchanges should also rise. They chart the rise of Tether transfers with the increase in reported volume and believe some of it may be accurate or close.
Last modified: March 4, 2021 2:35 PM