Before And After China's ICO Ban: Which Countries Are Trading The Most Bitcoin Cash?

China’s latest regulatory crackdown: cryptocurrency

In 2013, the People’s Bank of China (PBoC) came out with a guidance specifying that Bitcoin is not to be considered a currency, but neither outlawing nor prohibiting individuals from owning Bitcoin. Since then, China has witnessed an unprecedented rise in unregulated cryptocurrency trading, most recently with Bitcoin Cash. However, the rapid spike in activity got the regulator suspicious of the role cryptocurrencies could play in capital flight and money laundering activities. So, on September 4th, in a statement, the regulator declared cryptocurrency “initial coin offerings” (aka ICOs) “illegal and disruptive to economic and financial stability.”

Ban on Initial Coin Offerings

ICOs are a hybrid between initial public offerings in traditional equity markets, crowdfunding, and venture capital, allowing start-ups to raise funds for new technology projects entirely by virtual money. Although the Chinese ICO market is relatively small compared to the overall economy, it had been gathering speed. According to the Beijing Internet Finance Association, almost $400 million was raised via 65 ICOs from January 2017 to July 2017. In its current state, the ban just means that Chinese start-ups cannot use an ICO to raise money. It does not affect Chinese crypto-currency developers and service providers otherwise.

Top 10 Bitcoin Cash Markets (USD) – September 13, 2017

#ExchangeMarket BaseCurrency PairVolume (24h)Volume (%)
1BithumbSouth KoreaBCH/KRW$85,032,30028.01%
2HuobiChinaBCC/CNY$65,127,60021.46%
3HitBTCChinaBCC/BTC$34,972,20011.52%
4OKCoin.cnChinaBCC/CNY$27,310,7009.00%
5KorbitSouth KoreaBCH/KRW$12,061,0003.97%
6BitfinexHong KongBCH/USD$10,209,7003.36%
7CoinoneSouth KoreaBCH/KRW$6,078,0702.00%
8BitfinexHong KongBCH/BTC$5,449,8001.80%
9PoloniexUSBCH/USDT$4,963,3901.64%
10HitBTCChinaBCC/USD$4,553,5401.50%
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 *Please note: Ticker symbols BCC and BCH both refer to Bitcoin Cash. Usage of the two tickers varies among cryptocurrency exchanges as reflected in the chart above.

Bitcoin Cash trading markets: China remains the leader

Before the September 4th ICO ban, the top 10 largest Bitcoin Cash markets were dominated by China (FXI) (YINN) with China-based cryptocurrency (ARKW) exchanges accounting for about 40% of all Bitcoin Cash trading as of August 14th. The September 4th ban did impact Bitcoin trading volumes immediately. However, the markets did not take too long to recover. Interestingly, China’s share in overall Bitcoin Cash trading volume has now increased to 43.5% (as of September 13). Huobi, HitBTC, and OKCoin.cn continue to serve as leading venues for Bitcoin Cash trading in China, accounting for 21.5%, 11.5% and 9% of total trading, respectively (see table above).

Meanwhile, South Korea (EWY) (HEWY) has remained the second most popular venue for the trading of Bitcoin Cash, accounting for over 33.98% of overall Bitcoin Cash trading volume (see table). Bithumb, Korbit, and Coinone are among the top trading portals being used in the region. Bithumb alone accounted for over 28% of all Bitcoin Cash market trading volume as of September 13.

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Also of note is the declining interest in the United States. In mid-August U.S. trading volumes accounted for over 21% of the ten largest Bitcoin Cash markets, whereas it has now dropped to less than 2% (see table above) just one month later.

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