Abstract: The three countries of East Asia were once considered to be the gold rush of cryptocurrency, but now the bad news of cryptocurrency exchanges is frequent, which reflects the problems that cannot be underestimated.
Like a cloud, the prospects of the East Asian cryptocurrency market are more uncertain with recent bad news, which has put more pressure on East Asian investors, the important players in the currency circle.
- Foreign media: Yahoo Japan's cryptocurrency exchange will open service on May 30
- The supervision continued to follow, and the Japanese Finance Agency issued a draft investment guide for cryptocurrency funds.
China, Japan and South Korea are the three strongest voices in the East Asian cryptocurrency market. At present, the volume seems to be a little weak, especially in the field of exchanges, which is chilly.
Let's look at Korea first. On August 19th, financial media Finance Magnates quoted Business Korea as a report that 97% of South Korea's cryptocurrency exchanges were on the verge of bankruptcy due to low transaction volume. “In terms of trading volume, only five or six Korean exchanges rank among the top 100 in the world.” South Korea’s low trading volume has led to more and more Korean encryption startups seeking to list on overseas exchanges.
In addition to the unsatisfactory volume of transactions, regulation has increasingly become a force for the survival of the exchange. In April of this year, Coinnest, Korea's fourth-largest cryptocurrency exchange, announced that it would stop serving. A year ago, Coinnest CEO Jin Yihuan and his management were arrested by the Southern District Prosecutor's Office in Seoul for alleged corruption and fraud.
Look at Japan again. On August 19th, cryptocurrency analyst Joseph Young said that according to CryptoCompare, the yen accounts for 10% of global Bitcoin transactions; considering that Japan's cryptocurrency exchange is authorized by the Japan Financial Services Agency (FSA). It may be more difficult for Japanese exchanges to expand trading volume.
At present, the Japan Financial Services Agency has approved 19 exchanges, but 110 have been “backlog” in the registration approval process. At the end of last year, the Financial Services Agency issued detailed regulatory rules to impose strict restrictions on cryptocurrency exchanges, financial and price disclosures, margin trading and encryption custody services to combat illegal activities such as money laundering and increase industry transparency. .
Finally, look at China. August 19th news, according to CryptoGlobe August 19th news, cryptocurrency derivatives exchange BitMEX will not allow users in Hong Kong, China to access. BitMEX said in the announcement that the adjustment is related to regulation, and BitMEX has long worked with regulators to develop standards to help cryptocurrencies enter the mainstream. BitMEX said that this adjustment will have no financial impact and will only affect very few people.
It is worth mentioning that this time BitMEX also added the user of the registered place, Seychelles, to the list of forbidden visits. According to TokenAnalyst data, many traders chose to leave BitMEX in July, resulting in a net inflow of net bitcoin per month hitting an all-time low, while outflows were about $500 million.
Why is it important?
The three countries of China, Japan and South Korea were once considered to be the gold rush of cryptocurrency. According to a research report released in June this year, Bitcoin traded in China, Japan and South Korea more than other regions, with a premium of up to 5%.
The currency further stated that
Japan's cryptocurrency exchange Bitflyer In the month since mid-May this year, the bitcoin-to-yen trade has a premium of 5% on FCBTC/JPT, and the last time such a high premium was in July last year;
Bithumb Bitcoin, one of Korea's largest cryptocurrency exchanges, also had a maximum premium of 5% to the Korean won BTC/KRW, the last time it reached this level was in November last year;
Although China does not allow the trading of bitcoin, the over-the-counter USDT premium to the renminbi exceeds 3%, the highest since mid-April this year, and the second premium this year is higher than 2%. However, in the context of high premiums, there are still unstoppable exchanges. In addition to South Korea's Coinnest announced the cessation of services, the Hong Kong Stock Exchange GateCoin was forced to liquidate and enter the liquidation process in March this morning.
The downfall of cryptocurrency exchanges in East Asia is actually a microcosm of the global downturn. Since the beginning of 2019, eight cryptocurrency exchanges have been closed. Currency exchanges closed in 2019 include: Coinome, Coinpulse, Coinnest, Coinroom, Liquid Exchange, QuadrigaCX, Cryptopia, and Gate coin.
According to Yassine Elmandjra, a crypto analyst at ARKinvest, a financial research firm in New York, the average life expectancy of cryptocurrency exchanges is only 18 months, as a significant portion of the exchanges are victims of password hacking, mismanagement, and bitcoin theft.
For example, Cryptopia, the New Zealand cryptocurrency exchange, could no longer maintain its business after a $16 million hacking in January. Coupled with the accompanying increase in debt and the regulatory pressure to protect funds and limit overall transactions, the problem has become more and more serious, and ultimately it has no way to end in bankruptcy.
Is there still a drama in the cryptocurrency exchange?
The closure of cryptocurrency exchanges is not only a “natural consequence of the decline in trading volume” but also a “regulatory issue and business decision”.
The trading volume of the currency circle declined, and the analysts attributed the decline of the altcoin. “Most of the altcoin stagnation” has become the norm in the market; the dominant position of Bitcoin is getting stronger (accounting for more than 65% of the market share); the goal of making speculators can be more and more limited. Wall Street financial analyst Max Keiser said in an interview recently that the bitcoin market will be stable and eventually transform from value storage to trading medium, and the altcoin market will never return.
A chart created by analyst Willy Woo captures the absolute dominance of Bitcoin over the past seven months. This chart tracks the price of the altcoin at the BTC price. The general trend shows that the price of altcoin has plummeted against bitcoin. Especially in April 2019, the entire altcoin market began to decline at the moment when Bitcoin soared. Traders seem to withdraw money from the altcoin and instead allocate it to bitcoin.
In addition, regulatory issues have also affected the currency economy. Unlike cryptocurrencies, which were previously in the gray zone, countries are now intensifying their regulation. On June 30th, at the V20 Summit held in the same period as the G20, the cryptocurrency industry representatives and regulatory authorities agreed to establish an international regulatory agency for the Virtual Money Service Provider (VASP). This also means that the tangible hand is determined to extend into the field of cryptocurrency.
In the United States , Bitfinex is continuing the “doomsday trial” with the Office of the Attorney General of New York, and has a protracted war on jurisdiction and securities fraud;
In Japan , the Japan Cryptographic Exchange Industry Association (JVCEA), an independent regulatory body of the cryptocurrency industry approved by the Japan Financial Services Agency, issued a “Self-checklist on cryptocurrency security management” to all its member companies, requiring member companies to Based on self-inspection;
In Hong Kong , China , the anti-acquisition new policy was introduced, and the blockchain enterprises have made a fortune in the road of shelling. The three giants of the mining machine – Bitian Continental, Jianan Zhizhi, and Yibang International have become the lessons of the past, and the successors – OK, fire coins By the way of the backdoor, the future obviously depends on the face of supervision.