The era of "zero transaction fees" will become history! The three major exchanges simultaneously released announcements on charging transaction fees

After stopping the "financing" and "coin financing" services, domestic digital currency trading platforms will once again charge transaction fees.

At around 8:00 p.m. today, the three major digital currency trading platforms in China, Huobi, Bihang, and Bitcoin China, simultaneously issued official announcements stating that

The exchange will adjust the transaction service fees for Bitcoin and Litecoin from 12:00 noon on January 24, 2017 (Beijing time): the transaction service fee will be charged in both directions at a fixed ratio, and the fee rates for maker and taker orders will be the same, both charged at 0.2% of the transaction amount.

Affected by the news, the price of Bitcoin fluctuated, falling from today's highest price of over 6,500 yuan to less than 6,100 yuan, a single-day drop of nearly 7%. As of press time, the price of Bitcoin hovered around 6,200 yuan.

Looking back to September 2013, when Huobi went online, it announced that it would permanently waive transaction fees. This was the first time in the industry that deposits, withdrawals, and transactions were completely free of fees, which attracted a large number of transactions and other exchanges followed suit. As time goes by, this default rule in the domestic industry will be broken.

Strategy trading will be impacted

Who will be most affected by the transaction fees? According to media statistics, among the three major Bitcoin exchanges in China, OKCoin estimates that 60% of transactions are executed by automated traders, while Huobi and BTC China estimate this figure to be 80%.

Southern Weekend quoted OKCoin founder and CEO Xu Mingxing as saying that it can be monitored from the background that some users make small profits through repeated high-frequency transactions, buying when they predict that the price will rise in the short term and selling after a few seconds. This is also an important reason for the huge trading volume of China's three major trading platforms. Behind the high-frequency trading is that the three platforms do not charge transaction fees, and users can buy and sell repeatedly at will.

Now, the two-way 0.2% handling fee means that the Bitcoin strategy trading market will be impacted and some strategies will become unprofitable. Pan Guoli, the founder of Biqushi, who is engaged in big data quantitative trading, looks at the impact of handling fees on quantitative trading:

"Charging handling fees will reduce market liquidity and hinder the inflow and outflow of large amounts of funds in the short term. We solve this problem by connecting with more domestic and foreign trading platforms. At the same time, the collection of handling fees will cause some strategies or quantitative robots with low returns to exit the Bitcoin market. When we started to get involved in Bitcoin quantification, we estimated that if the annualized return of the quantitative strategy was less than 50%, it would be difficult to survive in the Bitcoin market."

However, another user who had engaged in quantitative trading of Bitcoin told reporters, "There is no need to move this handling fee at all. It can only be earned back if the price difference is more than 0.5%. "This means that based on the current price, the price difference between the two domestic platforms is more than 30 yuan.

Industry norms are conducive to the healthy development of the community

There has been a long-standing call for industry regulation in China, but there is no actual regulatory department or policy in place. The unified transaction fee collection by the three major exchanges has opened a new round of industry regulation. The overall industry evaluation is positive. The weekly market dynamics observation report released by CITIC Securities' Finance and Valuation Group mentioned that

"The central bank's rectification has begun to show results, and the market will gradually return to rationality. The implementation of transaction fees on trading platforms is expected to further promote the maturity of the market."

Will the handling fee affect the entry of new Bitcoin users? Pan Guoli believes that it does not hinder newcomers from entering the Bitcoin market, "Just like we use Bitcoin and don't care about the handling fee of a few dollars. The volatility of Bitcoin is very good, which is enough to offset the impact of the handling fee."

The three major exchanges stopped financing and lending, and the re-imposition of fees will be the beginning of this round of overall adjustments in the industry. Among other platforms that provide digital currency trading services, Yunbi.com also confirmed to reporters that it will charge transaction fees; CHBTC said that it "supports charging, and the specific details are still under negotiation"; HaoBTC said that "it is expected that the exchange fee rate will be adjusted in the near future, subject to the website announcement"; BiChuang.com said that "it is in preparation, and the specific situation depends on the industry trend." As of press time, no confirmed responses have been received from other exchanges.