Ethereum might be making its way to the Chinese market following the announcement by one of the biggest digital currencies exchange, Huobi, that they will list ethereum on the 31st of May 2017.
In a statement, the exchange said that ethereum had become the second biggest digital currency by market cap and “there are many aspects of Ethereum which can outperform bitcoin, such as scalability, cost, speed.”
Huobi is the first of the big three Chinese exchanges to list Ethereum. They held out last year when eth came to everyone’s attention giving the market to smaller exchanges, but Huobi appears to have broken ranks, with their announcement contributing to eth’s price rise of some 40% today.
They are in fierce competition with OKCoin, so they may well follow soon as pressure to list eth would likely now be considerable, not least because eth’s market cap reached a high of $20 billion, the same level as the market cap of all digital currencies combined just two-three months ago.
However, neither exchange allows withdrawals of digital currencies, but fiat can move in and out. They stated such freeze in withdrawals was temporary, but there are suggestions it was at the behest of PBoC, so we can’t be sure they will ever re-open withdrawals until they actually do so.
The development, however, is very significant because it opens the Chinese market to eth. Previously, the easier way to buy eth in China may have been to buy bitcoins and then convert it to eth or to use one of the smaller exchanges such as Yuonbi, but now most Chinese citizens might be able to buy eth directly.
Despite the withdrawals problem and an open investigation by PBoC which has suggested in leaked documents there may be punishment of the exchanges due to breach of rules – with the punishment appearing to be a fine – the Chinese exchanges still have some respectable trading volume.
So this may have an effect on eth’s price, but nothing like it would have had it been before the investigations or had withdrawals open, because China appears to have given away the digital currencies market to Japan and South Korea.
The latter especially has seen significant trading volumes, at times being a driving force in eth movements, while the Japanese exchange, BitFlyer, now has the highest level of bitcoin trading volume.
China’s recent decision, therefore, and its on-going freeze, might go down as one of the biggest strategic mistake as the country gives away an industry which could become worth trillions down the line.