Investors in China are reportedly loading up on Bitcoin (BTC) at a premium based on the multi-step process required to turn fiat into most cryptocurrencies in the country.
According to a recent analysis by cnLedger, Chinese traders are paying a fairly decent premium (~4.5%) to buy Bitcoin over the counter (OTC), paying 7 CNY for 1 Tether (USDT) on average when the exchange rate is roughly 6.7 CNY per USDT.
“Why [is the] USDT premium going up? After the PBoC ICO/exchange ban, the most convenient way to buy [cryptocurrencies] in China, is to buy stable coins like USDT first using OTC, and then trade it into any cryptos you want in exchanges,” explained cnLedger.
1/ Chinese markets reveal strong buys. OTC (Over-The-Counter) trades, the almost only way to buy bitcoin with fiat in China, showing considerable $ premium (1 USDT = 7 CNY) over the official rate of 1 USD = 6.7 CNY. pic.twitter.com/bd0n0DGFVU
— cnLedger (@cnLedger) April 8, 2019
As we previously reported, “bitcoin” topped the list of hottest new keywords on Baidu, China’s version of Google, during the rally last week.
It seems that Chinese investors continue to have a significant interest in Bitcoin and cryptocurrencies, despite the government’s ongoing efforts to ban civilian access to the asset class.
Bitcoin is currently down 1.2% over the last 24 hours to $5,225, giving the largest digital currency a $92.2 billion market cap (51.2% of the total crypto market).
Image: Scott Brown / Flickr
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.