Despite the controversies with Bitfinex and Tether, the demand of the stablecoin is skyrocketing in the Asian markets, especially in China.
According to a Diar report, the demand for Tether in China surpassed $10 billion this year, compared to the total demand of more than $16 million in 2018.
“2019 to date flows into exchanges catering primarily for Chinese traders beat the $7Bn of all the transactional value for 2017,” the blockchain research company stated.
Circumventing Chinese ban
The Chinese government banned all crypto exchanges in the country in September 2017, which was then the largest crypto trading market on the globe. Despite the ban, the traders were allowed to trade on over-the-counter (OTC) desks. This enables professional traders to get their hands on the stablecoins and move them to overseas exchanges to trade crypto.
“Tether on-chain movements stateside account for a tiny 3 percent of known volumes at $450Mn, more than $10Bn less than flows sent and received by Chinese exchanges,” the report added.
The year-long bear in the crypto market also did not slow down the Chinese demand, whereas, it skyrocketed with the recent bull run.
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“In the 2018 bear market, Chinese exchanges accounted for 39 percent of all known on-chain transaction value for Tether. This year to date, the red dragon is responsible for a whopping 60 percent,” Diar noted.
“Global exchanges like Binance and Bitfinex have a share equivalent to half that at 31 percent, dropping from the 47 percent share seen for both 2017 and 2018.”
Dipping demand in the US
Though the demand for stablecoin is rising in the Chinese market, the trend is the opposite in the United States.
“US-based exchanges saw their share of the stablecoin demand/trading drop from 44 percent in 2017 to less than 10 percent in 2018,” the research company stated.
However, the research firm is also considering the numbers with a pinch of salt as according to a Bitwise report, 95 percent of the crypto trading volumes are fake.
“Bitwise, which looked into 83 exchanges, found a mere 10 to be compliant across its own tests. And there are clear examples of dubious trading volumes that resemble simple algorithms filling up order books that fall far from reputable exchange trading trends,” Diar noted.
Last week, Diar revealed that the large-scale crypto holders are accumulating Bitcoins as $36 billion worth the digital assets are stored in wallets with 1,000-10,000 BTC.