JorgeStolfi
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January 21, 2014, 04:23:53 PM

I cant figure out why BTCChian went from the biggest exchange in the world to one with very low volume, because of the whole china situation Huobi became the biggest exchange, for what reason ?
From what I have read here, BTC-China decided to play it safe, and stopped accepting cash deposits. They now use vouchers that one can buy at e-commerce sites -- a system which is very cumbersome at least.

Huobi and OKCoin still accept cash deposits through commercial bank accounts.  I have read here that the owners are related to powerful politicians; if true, that may explain why they have chosen to run this risk.  I have seen no reports of problems with withdrawals, but presumaby they must be in CNY only.

Some traders/bots are generating the volume by buying/selling to themselves. No fees, no loss from that. I'm sure that this can be utilized for making money, and I'm even more sure that if you can make money from it, someone is doing it already.

Why people keep saying that of the Chinese exchanges, but not of the others?  There seems to be no evidence for that claim other than their huge volume -- which is quite expected.  Sure, there is a lot of robot trade, and zero fees encourage it; but robot trade is not necessarily fake.

On the other hand,  the 1-minute charts at MtGOX and now even BTC-e seem rather peculiar. 

Exchanges that are small and/or shrinking have obvious interest in padding their volume numbers with fake trades; and being unregulated have no reason to avoid the practice.  Note that an exchange that has  transaction fees for ordinary clients may forfeit them for special friends -- such as themselves.