After a nearly four-month suspension, major cryptocurrency exchanges in China resumed Bitcoin withdrawals on May 31, 2017. The move sparked a notable price increase, with Bitcoin climbing from around 15,000 CNY to over 17,900 CNY per coin within days. Despite the upward momentum, trading volume remained flat—highlighting a cautious market sentiment amid ongoing regulatory uncertainty.
This development marks a pivotal moment for digital asset investors, especially as platforms begin reintroducing key functionalities like withdrawals and expanding support for other cryptocurrencies such as Ethereum. While excitement builds, questions remain about long-term sustainability, market regulation, and investor protection in an increasingly complex ecosystem.
👉 Discover how top platforms are adapting to new compliance standards while boosting user access.
Limited Impact on Trading Volume
Although Bitcoin’s price rose sharply following the resumption of withdrawals, trading activity did not follow suit. At the time of reporting, daily trading volume across the three largest domestic platforms hovered around 13,000 BTC—consistent with pre-withdrawal levels.
Several factors help explain this disconnect:
- Fee structures discouraging high-frequency trading: Most platforms now implement two-way trading fees (up to 0.4% total), reducing profit margins for active traders.
- Growing competition from alternative cryptocurrencies: Coins like Litecoin and Ripple have gained traction, diluting Bitcoin’s dominance.
- Regulatory观望 (wait-and-see attitude): Investors are closely watching for official guidance from China's central bank regarding digital currency policies.
Notably, none of the major exchanges issued formal announcements about restarting withdrawals. However, customer service representatives confirmed that limited withdrawals were being tested under strict daily caps. For example, Huobi allowed a maximum of 50 BTC per day and per transaction, requiring video verification for security.
This phased approach reflects heightened compliance efforts—particularly around anti-money laundering (AML) protocols—following directives from the People’s Bank of China in February 2017.
The Rise of "Brick Movers" During Price Divergence
One group celebrated the return of withdrawal capabilities: so-called “brick movers” (zuanjia), traders who exploit price differences between exchanges by transferring assets from low-priced platforms to higher-priced ones.
In the immediate aftermath of withdrawal resumption, significant price gaps emerged. On June 1, OKCoin’s price reached 16,601 CNY/BTC, while Yunbi quoted up to 17,100 CNY/BTC—a nearly 500 CNY difference. After accounting for combined transaction and withdrawal fees (approximately 0.4%), arbitrageurs could still earn 200–400 CNY per BTC moved.
With daily withdrawal limits restricting volume (e.g., 10 BTC/day per user), savvy traders could still net several thousand yuan daily through disciplined execution. By June 5, however, inter-exchange prices had converged domestically, largely closing the arbitrage window.
Still, a gap persisted between domestic and international markets. OKCoin’s Chinese platform traded at approximately 300 CNY less than its global counterpart—suggesting continued capital controls or demand imbalances.
👉 Learn how global arbitrage opportunities evolve when regional restrictions shift.
Expansion Beyond Bitcoin: Ethereum and Other Digital Assets
To revitalize user engagement and diversify revenue streams, platforms began adding support for other major cryptocurrencies.
On May 31:
- Huobi launched Ethereum (ETH) trading and enabled deposits and withdrawals.
- OKCoin simultaneously announced full Ethereum integration.
These moves aim to attract users amid declining Bitcoin-centric activity. With margin lending suspended and trading volumes down to just 1% of previous peaks, exchanges face severe revenue pressure. Transaction fees and financing income—once primary revenue sources—are now negligible.
However, the absence of standardized listing criteria raises concerns. There is currently no transparent framework governing which digital assets can be listed or when—leading to inconsistent offerings and potential risks for uninformed investors.
Regulatory Gaps and Risks in the Digital Asset Space
The rapid rise of alternative tokens like Ripple (XRP)—which surged up to 50x in value over two months—underscores both opportunity and danger in unregulated markets. While early adopters reaped massive gains, many lesser-known coins operate on fringe platforms with minimal oversight.
Industry experts warn that the current landscape resembles a “murky pond” (hunshui), rife with scams, Ponzi schemes, and misleading promotions. A seasoned trader advised: “If a digital currency is only listed on one obscure exchange, stay away.”
Key challenges include:
- Anonymity enabling illicit use: Bitcoin’s pseudonymous nature has made it a tool for ransomware payments and darknet transactions (e.g., Silk Road).
- Security vulnerabilities: Exchange hacks remain common due to weaknesses tied to blockchain infrastructure and custody models.
- Scalability issues: Bitcoin’s fixed block size limits transaction throughput, causing network congestion during peak usage.
As noted by Yan Zhi, CIO of Ruizitong: “Bitcoin’s technical design introduces inherent risks for exchanges—especially around theft prevention.”
Toward Self-Regulation and Institutional Oversight
Recognizing these systemic threats, leading platform operators in Beijing are exploring the formation of a self-regulatory alliance. The goal is to establish common standards before the industry suffers irreversible reputational damage.
While details remain vague—including timeline and governance structure—the initiative signals growing maturity among domestic players.
Meanwhile, official voices are shaping the narrative. Yao Qian, Deputy Director of the PBOC’s Technology Department and head of the Central Bank Digital Currency Research Institute, clarified that Bitcoin should be classified as a quasi-digital currency—not legal tender. Speaking at a Shanghai-based financial think tank, he emphasized the need for robust regulatory frameworks around Initial Coin Offerings (ICOs) and token issuance.
His remarks reinforce expectations that China will continue tightening oversight on decentralized finance activities while advancing its own sovereign digital currency.
Frequently Asked Questions (FAQ)
Why did Bitcoin prices rise after exchanges resumed withdrawals?
The resumption signaled improved liquidity and restored investor confidence after months of restrictions. Though not a fundamental change in supply or demand, it reduced perceived risk—prompting short-term buying pressure.
Why didn’t trading volume increase alongside price?
High trading fees discourage frequent trades. Additionally, many investors are waiting for clearer regulatory signals from authorities before increasing exposure.
What are “brick movers,” and how do they profit?
Brick movers (arbitrage traders) transfer Bitcoin from lower-priced exchanges to higher-priced ones. Even after fees, price discrepancies allow profitable trades—especially during transitional periods like post-suspension reopenings.
Is it safe to invest in smaller cryptocurrencies like Ripple or Dogecoin?
Smaller coins carry higher volatility and regulatory risk. While some deliver outsized returns, others lack transparency or real-world utility. Always research thoroughly and avoid platforms with no independent audits.
How does blockchain scalability affect users?
Limited block size means slower confirmation times during high traffic. This leads to delayed transactions and higher fees—impacting usability for everyday payments.
Will China eventually ban all cryptocurrency trading?
While full prohibition remains unlikely, stricter regulations on ICOs, trading platforms, and capital flows are expected. The focus is on preventing financial instability rather than eliminating digital assets entirely.
👉 Stay ahead of regulatory shifts with real-time market insights from trusted global platforms.
Looking Ahead: Innovation Amid Uncertainty
Despite short-term disruptions, interest in blockchain technology continues to grow beyond speculation. From art trading to supply chain tracking, institutions are exploring practical applications. For instance:
- A southern cultural exchange is piloting blockchain integration for artwork authentication.
- Another platform introduced “Puer Coin,” linking Bitcoin mechanics with Puer tea investments—a novel fusion of tradition and tech.
As innovation accelerates, so must governance. Sustainable growth depends on balancing openness with accountability—ensuring digital assets serve legitimate economic purposes without enabling abuse.
For investors navigating this dynamic space, staying informed is paramount. Whether through self-regulatory initiatives or evolving policy frameworks, the path forward hinges on transparency, security, and responsible adoption.
Core Keywords: Bitcoin withdrawals, cryptocurrency price surge, blockchain technology, digital asset regulation, Ethereum integration, arbitrage trading, ICO framework, exchange security