Trader Rumors Swirling at Huobi, China and the Globes Largest Bitcoin Exchange

Rumors are emerging today about the future of Chinese based HuoBi, one of the world’s largest Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term exchanges by volume. Volumes traded on HuoBi have risen as the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term continues to provide CNY denominated deposits, even as such transactions were temporarily halted at BTC China. Currently, rumors on Twitter have been both positive and negative including tweets about the CEO being arrested, to them scoring a partnership with HSBC.

Until recently, HuoBi was a lesser known exchange with little known information about the company and its founders.

Emerging From Nowhere

Less than a month ago, it was reported on our sister site Forex Magnates that The People’s Bank of China (PBOC), banned payment companies from doing business with bitcoin exchanges. Before this development, leading Chinese exchange, BTC China, had established itself as the leading exchange worldwide by surpassing MTGoxand Bitstamp trading volumes, the previous global leaders.

The PBOC decree naturally led to a shakeup of the Chinese bitcoin marketplace as all the players had to adjust to the new legal reality and exchanges had to find clever new ways to receive RMB Yuan deposits. Quite unexpectedly though, that event and the confusion that followed brought a single new exchange to dominate bitcoin trading volumes not just in China but in the whole world.

HuoBi, meaning Fire Currency in Mandarin Chinese, has emerged as the new global leader of bitcoin exchanges. This previously unknown player is now dominating the landscape and towering over all others with a market share of over 60% of worldwide trading volumes.

At the time of writing, the three top non-Chinese exchanges by daily trading volumes are Japan based MtGox with 10,500 BTC, the Russian BTC-E with 14,600 BTC and UK based Bitstamp with 13,300 BTC. The top three Chinese Bitcoin exchanges listed by trade volumes in the last 24 hours are: BTC China with 11,000 BTC, OkCoin with 33,800 BTC and HuoBi with 128,800 BTC.

If the figures are to be believed, HuoBi now has daily trading volumes over 10 times those of the previous two global leaders, BTC China and MTGox. In fact, HuoBi has a daily trading volume over the combined figures for all over five global leading brokers put together.

So how can HuoBi phenomenal rise can be explained? There seems to be two possible reasons for it. The first reason is that since the PBOC decree that payment providers cannot work with bitcoin exchanges, both BTC China and OkCoin no longer were able to accept direct deposits and had to let clients fund their accounts by circumventing payment providers all together by selling bitcoin vouchers on online marketplaces or via 3rd party vendors. HuoBi did not go down that route, instead allowing users to deposit Yuan to the exchange’s founder’s personal bank account, as person to person transfers are not illegal only transfers to bitcoin exchanges accounts are.

The second reason is that HuoBi still does not charge any fees and thus attract much more Chinese clients to work with it. The two other leading exchanges In China started charging fees from clients after the PBOC announcement, in order to discourage speculators, day traders and high frequency electronic trading systems from using their systems, generating volumes and bringing government attention.

Is HuoBi making up its numbers? This is also a possible explanation as some bitcoin exchanges were accused in the past of cooking the books as well in order to make their business seem bigger than it really is. However, this does not seem very likely as the added government attention in China can have considerable costs that will come to bear not just on the exchange but on its founder.

Current Events

The feeling among many in the industry has been that despite HuoBi’s ability to circumvent barriers in place for CNY deposits to bitcoin exchanges, it is only a matter of time before they get targeted by the government. As result, activity at the company is closely watched by traders as negative news could trigger another bout of selling, similar to the aftermath of BTC China’s deposit halt.

Currently, traders are mentioning a post on Reddit that appears to show that HuoBi is expanding its deposit options. Based on the report, HuoBi customers are now being given the option to both deposit directly into its CEO Leon Li’s personal account as well as a new business account. This has led many to believe that HuoBi may have secured a deal with either a major bank or the government to continue to operate. Within the deposit options are accounts at China Merchants Banks and China Construction Bank. However, unconfirmed rumors are also pointing to a pact with HSBC based on a Twitter tweet about the subject today.

Based on the rumors, prices of bitcoin declined from their highs today, hitting a low of $826 on Bitstamp, after trading to $905 earlier. However, prices have currently bounced to $862, as traders are interpreting some the potential of a HuoBi corporate account for deposits as a positive for demand. Overall, prices of bitcoin are expected to remain volatile until additional clarity about the future of HuoBi becomes settled.