Bitcoin RMB price no longer dominates Bitcoin price market

Golden Finance News - Is there still a close connection between Bitcoin price and the Chinese Bitcoin market? Although this connection has not been confirmed, it does become an interesting indicator for Bitcoin price reference.

On April 12, the RMB strengthened its convertibility with most world reserve currencies including the US dollar. Image source: Golden Finance

On April 12, the Chinese yuan strengthened its convertibility against most of the world’s reserve currencies, including the U.S. dollar.

Almost simultaneously with the appreciation of the Chinese yuan, the price of Bitcoin listed on most Bitcoin exchanges fell from $1,232 to $1,170, a drop of about 5%.

While a five percent move in Bitcoin’s price is part of normal daily fluctuations, the link between Bitcoin’s price decline and the strong performance of the Chinese yuan has piqued the interest of everyday traders.

China's Bitcoin transactions only account for 8% of global Bitcoin transactions. Image source: Golden Finance

BTC/CNY — Is it a determining factor in Bitcoin price? Not anymore

In the past, BTC/CNY was considered the main determinant of Bitcoin prices until Chinese regulators enforced a policy that required local Bitcoin exchanges to charge transaction fees, conduct strict censorship, and suspend withdrawals, which significantly reduced the daily trading volume of the Chinese Bitcoin trading market as a whole.

By the end of 2016, China’s bitcoin exchange market was thought to handle approximately 95% of global transactions. However, the actual number of Chinese bitcoin exchanges currently only accounts for 8% of the global bitcoin trading market due to enforced transaction fees and strict regulation.

China’s bitcoin trading accounts for only 8 percent of global bitcoin trading volume, so factors affecting the Chinese market seem unlikely to affect the global bitcoin trading market, let alone the bitcoin price.

Reactionary trading by US traders has a greater impact

At present, the United States' Bitcoin trading volume accounts for more than 27% of the global Bitcoin trading volume, making it the world's second largest Bitcoin trading market. Compared with the Chinese Bitcoin trading market, the US market has a greater impact on Bitcoin prices. With the easing of Japan's Bitcoin policy environment, Japan's share of global Bitcoin trading volume has also increased significantly.