CHBTC Is Now the World’s Largest Bitcoin Exchange by Volume, But It’s Unlikely to Last

CHBTC has become the world's largest bitcoin exchange when measured by volume in the aftermath of other China-based exchanges removing their no-fee trading policies. At this time, CHBTC has not implemented fees for trading the Chinese Yuan/bitcoin (CNY/XBT) pair. According to cnLedger , the exchange plans to implement trading fees at an as-of-yet undetermined time in the future.

BTCC, Huobi, OKCoin and YUNBI Implement Trading Fees

Earlier this week, four of China's largest bitcoin exchanges added trading fees to their platforms following reviews from regulators at the People's Bank of China (PBOC). According to statements released by bitcoin exchanges BTCC , Huobi , OKCoin and YUNBI , the move is an attempt to limit market manipulation and exchange-rate volatility.

According to Reuters , the addition of trading fees was not a direct order from the PBOC. Instead, it was an attempt by the exchanges to help align with the PBOC's desire to see the bitcoin market cool down.

According to Bloomberg , the no-fee trading policy on China-based bitcoin exchanges had been attractive for those who developed bots to do their trading for them.

CHBTC Still Has a No-Fee Policy - For Now

For the time being, CHBTC has decided to continue with their current fee policy until a new fee policy is decided on and implemented. For this reason, the volume at the exchange has not experienced the massive declines seen at the big three exchanges in China.

CHBTC is now doing about as much CNY-based bitcoin trading in volume as BTCC, Huobi and OKCoin combined.

In addition to CHBTC, London-based exchange Coinfloor also offers no-fee bitcoin trading. Ironically, Coinfloor implemented the no-fee trading policy last week .

CHBTC charges fees on withdrawals , and the fee for a withdrawal is based on a user's trading volume. In other words, users are incentivized to trade more and inflate the total trading volume of the exchange before a withdrawal is made.

Although CHBTC does not charge any fees on bitcoin trades, the exchange does charge a 0.05 percent fee on ether classic trades.

China's Role in Bitcoin Trading Not as Big as Previously Thought

Severe declines in bitcoin trading volume have been seen on the China-based bitcoin exchanges that have recently added fees to the trading process. For example, bitcoin trading volume on BTCC has declined more than 90 percent over the past few days .

It's likely that CHBTC will see a similar decline in trading volume when they follow the lead of the other China-based bitcoin exchanges and implement trading fees.

According to CoinMarketCap , China still has the three largest bitcoin exchanges by volume among exchanges that charge fees on trades.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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