Digital asset exchange Huobi Global has revealed its intention to exit the Chinese Market. The crypto trading platform with Chinese roots said it will stop processing transactions for existing users on the mainland by the end of the year.
Huobi Global Halts Services in the Peopleâ€™s Republic
Crypto exchange Huobi Global is going to discontinue services for users based in mainland China this month. In a statement quoted by the English-language Chinese TV channel CGTN, the company announced on Sunday that starting from 11:00 a.m. Beijing time on Dec. 14, users in the Peopleâ€™s Republic will not be allowed to purchase cryptocurrencies.
Huobi Global further detailed it will cease crypto exchange operations on the following day, Dec. 15, and terminate all crypto asset trading by 12:00 p.m. on Dec. 31. However, traders will still be able to log into their accounts and apply for the withdrawal of remaining assets within the next one to two years, emphasized the platform, which has not accepted new customers from China since September.
The report notes that several cryptocurrency exchanges are preparing to pull out of the Chinese market by the end of 2021. Their moves come after Beijingâ€™s decision this year to reiterate restrictions on cryptocurrency transactions which was followed by a crackdown on trading and mining. Besides Huobi Global, the list includes other major platforms such as Binance and Kucoin.
The state-run CGTN remarks that China has been stepping up efforts to limit the crypto market amid what it calls a global cryptocurrency crackdown. â€œConcerns grow that the highly volatile digital currencies could undermine the stability of financial and monetary systems, increase systemic risk, promote financial crime and hurt investors,â€ the news service adds.
The Peopleâ€™s Republic banned crypto-related activities back in 2017 and while the government went after coin trading and token sales, authorities did not interfere with mining until this spring. In May, the State Council, the cabinet of ministers in Beijing, decided to clamp down on the crypto industry following President Xi Jinpingâ€™s pledge for the country to achieve carbon neutrality in the next four decades.
Leading mining hardware producer Bitmain provided another example of a major crypto company exiting the Chinese market. In October, the Beijing-based manufacturer announced it will no longer ship its products to the mainland, explaining the move was in response to local regulations. As is the case with other businesses, Bitmain stressed the decision does not concern its operations in the special administrative region of Hong Kong and neighboring Taiwan.
Do you expect more crypto companies to pull out of the market in mainland China? Tell us in the comments section below.
BTC and altcoins took a beating over the weekend, but data shows a market with healthier trading conditions, even if prices consolidate for the foreseeable future.
Looking at the winners and losers of the past week clearly shows that traders endured some serious heat as the total crypto market capitalization dropped by 12.7% when Bitcoin fell to $41,000. This sharp downside move knocked the figure from $2.37 trillion to $1.92 trillion on Dec. 3 and a total of $2 billion long future contracts were liquidated.
Bitcoin (BTC) price retraced 14.6% over the past week, effectively underperforming the broader altcoin market. Part of this unusual movement can be explained by the performance seen in decentralized applications which held up better than most of the market. Data shows Ether (ETH) traded down 6.0%, Binance Coin (BNB) lost 7.3% and Solana (SOL) dropped by 7.8%.
This week’s top gainers include OKExâ€™s OKB token (OKB) and Bitfinex’s UNUS (LEO). Perhaps these benefited from not having a United States entity because the regulatory uncertainties in the region continue to increase. Moreover, scaling solutions Polygon (MATIC) and Algorand (ALGO) benefited from Ethereum’s $40 or higher network transaction fees.
Terra (LUNA) featured on last week’s top performers after its built-in token burn mechanism significantly reduced the supply. Meanwhile, Stacks (STX), previously known as Blockstacks, pumped after D’Cent wallet included support for SIP010 tokens.
Sharing solutions had a disappointing week
Among the worst performers were three decentralized sharing solutions: Theta Network (THETA), Filecoin (FILE), and Internet Computer (ICP). They were not alone, as some of the sectors’ altcoins below the top-80 also crashed. Siacoin (S.C.) endured a 34% drawdown and Ankr Network (ANKR) dropped by 31.8%.
Chiliz (CHZ) suffered direct competition after Binance successfully launched an independent soccer fan token called SANTOS. Initially, Chilizâ€™ platform was created to host exclusive promos, services and voting for their fan tokens and more recently the project ventured into the non-fungible NFT market. However, that initiative also lost impact after soccer player Neymar launched a collection with NFTStar.
Despite being among the bottom performers, decentralized exchange aggregator 1inch Network (1INCH) concluded a $175 million Series B investment round and these funds will be used to expand the protocolâ€™s utility.
Tetherâ€™s premium and the futures’ perpetual premium held up well
The OKEx Tether (USDT) premium measures the difference between China-based peer-to-peer (P2P) trades and the official U.S. dollar currency, and in the past week it decreased slightly.
Currently the indicator has a 98% reading, which is slightly bearish, signaling weak demand from crypto traders to convert cash into stablecoins. Even at its best moment over the past two months, it failed to surpass 99%, so Chinese players have not been excited about the general market.
The overall impact of last weekâ€™s correction was a drop in the total futures open interest, down 28% to $16.7 billion. Nevertheless, the move was expected since the total market cap retraced and some $3.9 billion worth of liquidations took place during the week.
More importantly, the funding rates on Bitcoin and Ethereum futures quickly recovered from Dec. 3 price crash. Even though longs (buyers) and shorts (sellers) are matched at all times in any futures contract, their leverage varies.
Consequently, to balance their risk, exchanges will charge a funding rate to whichever side is using more leverage and this fee is paid to the opposing side.
Data reveals that a modest bearish trend occurred on Dec. 3 and 4 as the 8-hour funding rate went below zero. A negative funding rate shows that shorts (seller) were the ones paying the fees, but the movement faded as soon as BTC and ETH prices bounced 15% from their lows.
The above data might not sound encouraging, but considering that Bitcoin suffered considerable losses this week, the overall market structure held nicely. If the situation was worse, one would definitively not expect a 99% Tether premium or a positive perpetual funding rate.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.