Original title: bitcoin "move bricks" business busy: a huge difference between domestic and foreign exchange formation of arbitrage space
Surging news reporter Zhou Yan inflammation
In China, while biting out against the Bitcoin Exchange, the crowd that "arbitraged" the bitcoin price differential between home and abroad "plunged into motion."
September 14, China's first bitcoin exchange bitcoin China released a notice that the platform immediately stop the registration of new users, and will be September 30 to stop all trading business. While the surging news was informed earlier, regulators have already issued a circular to the local financial regulatory authorities, requiring the closure of the registration operation in the local bitcoin exchange.
Affected by the negative news, Bitcoin prices plummeted. In a matter of minutes, the bitcoin price on the Firecoin Network was reported at 21,100 yuan, a drop of 15% on that day. The bitcoin price in Bitcoin China was reported at 19,100 yuan, a decrease of over 20%. At night, bitcoin prices rebounded again. However, on Sept. 15, the price of bitcoin plunged again. As of 7:00, the bitcoin quotes of China Bitcoin Network and Bitcoins China were respectively 18,700 yuan and 18,000 yuan.
It is noteworthy that bitcoin is not the same in prices at various exchanges both at home and abroad, which creates a new business - "moving bricks." The so-called bitcoin move bricks, that is, bitcoin moves between different exchanges, earn spread arbitrage.
Due to the different countries' different bitcoin regulatory policies, the bitcoin price in China has always been slightly lower than that of overseas due to the regulatory strengthening. Many people are targeting this opportunity to buy bitcoin in the domestic platform and then dump it to foreign countries Currency platform, and then make deposits to overseas accounts.
This process has also been criticized for allegedly laundering and breaking foreign exchange controls. In January this year, the central bank settled in Beijing and Shanghai to examine the three major bitcoin exchanges, one of the focuses at that time was the implementation of the anti-money laundering system. The central bank may not participate in any money-laundering activities nor shall it violate the financial laws and regulations of the state such as anti-money laundering, foreign exchange management and payment and settlement. If any bitcoin trading platform violates the above requirements and the circumstances are serious, it will draw the relevant departments to ban it according to law.
In January this year, the central bank settled in Beijing and Shanghai to check the three major bitcoin exchanges, due to the active trading in China, accounting for more than 80% of global market share, the domestic platform offer is higher than overseas, so the money laundering through Bitcoin and a breakthrough in foreign exchange control theory It is OK, but it will indeed lose a portion of the difference. Coupled with the transaction, transfer and withdrawal fees, this model is uneconomical.
However, after the intervention of the central bank, this became a "good business." Earlier this year, Japan and South Korea bitcoin transaction volume soared, the price is also higher than the Chinese platform a large fraction, so there are some bitcoin players team "bricks" to Japan and South Korea arbitrage. An industry source told surging news that one such team of 78 people made a profit of hundreds of millions of yuan in this round of price differences.
And last week when the media revealed that China would ban bitcoin currency trading, the prices of domestic exchanges plunged at a mere 80% of the overseas prices at the lowest domestic prices, which created a huge space for arbitrage.
"Last weekend (September 9-10) is the best time to move bricks and can be said to have come out of the nest," one industry source said.
And on September 14, another bit of arbitrage came as bitcoin China announced it would stop all its trading business.
"Foreign 3,500 knives, the domestic equivalent of 3200 knives, is totally natural opportunity to move brick," a bitcoin player in a circle of friends said.
However, one overseas bitcoin exchange told surging news that this kind of "moving bricks" is a technical activity or has a threshold. First of all, KYC (Know Your User) steps of foreign bitcoin exchanges do a good job in anti-money laundering and anti-terrorist financing. For example, HKEx will require users to reside in Hong Kong and need to provide relevant evidence. Second, When the arbitrage opportunity appears, it requires a large amount of liquidity, which has a relatively high financial requirement on investors.
Bitcoin outages are good for Bitcoin derivatives abroad. Registered in the Seychelles, BitMEX, a bitcoin exchange traded by the United States, told Surging News that every time China's central bank stepped up its supervision, the volume of its platforms would skyrocket. The reason for this is that some bitcoin in China Holders are reluctant to throw away the coins in their hands and choose to wait and see, but are not willing to devalue, so they will choose derivative instruments linked to US stocks to hedge their risks.
For example, they have a Bitcoin US Equity Return Swap (ETRS) model in which customers deposit bitcoins, issue orders to buy US stocks, and balance the depreciation of bitcoin in their own hands with the benefit of US stocks, After that, the customer still received bitcoin.
