Expert trading and stablecoins are the driving force that has enabled East Asia to become the world's largest cryptocurrency market.

East Asia is currently the world's largest cryptocurrency market, and China alone controls 65% of the world's Bitcoin computing power. This report primarily discusses the reasons for the recent downturn in joint ventures in East Asia and the coin's role in a stable market. And, the main differences between this market and traders in other regions.

Over the past 12 months, East Asia has seen an inflow of $ 107 billion in cryptocurrencies, 77% more than second-largest Western Europe. In our final analysis, this can be attributed to the fact that most of the restrictions are limited to local operations. In East Asia, only China controls 65% of the Bitcoin computing power in the world. It means,The rule of East Asia is largely due to the presence of cryptocurrency in the region.

The packaging industry in East Asia is driven by a particularly strong manufacturing industry, and the retail market is also very strong.The liquidity of the East Asian economy is also a self-sustaining activity. In terms of packaging, 44% of trade with East Asian destinations was directed to other locations in the same East Asian region, while Western Europe did not. accounted for only 22%. The potential and large size of the East Asian market are key players for the crypto industry in other regions. In fact, however, East Asia is the largest or second largest market of the other regions studied in this report. A major source of water resources in East Asia mentioned above is due to the benefits of mining. In effect, this means that new mined cryptocurrencies are constantly flowing into East Asia.

However, over the past 12 months, East Asia's share of the global cryptocurrency market has declined to some extent, not only under other shutdown regions, but also due to regular special operations. The reasons are discussed below. It also explores the unique role of coins in the economy of East Asia and the differences between traders in this region and traders in other regions.

East Asian traders expertly manage and pay a lot of tokens.

The cryptocurrency market in East Asia is led by expert traders.In the figure, around 90% of all remittances to East Asia are large scale experts (cryptocurrencies over $ 10,000). In the past 12 months, only professional traders from North America and Western Europe have achieved more than 90% market share.

Interestingly, professional cryptocurrency traders in the East Asian market speculatively trade more assets than similar regions such as North America, while in North America, the expert traders prefer to pay more and hold Bitcoin longer. time ..In the figure below, we can see the comparison of the exchanges of different types of cryptocurrency in different regions.

East Asia has the lowest percentage of Bitcoin-only transactions in the chain, accounting for 51% of the stock market. Out of our three similar regions, Eastern Europe accounts for 57% of Bitcoin transaction volume, the highest of them. North America and Western Europe represent 72% and 66% of the total Bitcoin market, respectively. As we'll see later, most stocks still have stable coins (usually Tether), butThe above image also shows the importance of tokens in the East Asian market.Tokens represent more total volatility in Bitcoin than in any other region, accounting for 16% of trade volume in East Asia. Specifically, the volume of Litecoin trading in East Asia is 2.9 times that of other regions. Likewise, the CRO (Crypto.com Coin) is 1.9 times the average ratio, the Designer (MKR) is 1.3 times the average ratio and Bitcoin Cash is 1.2 times the average ratio.

East Asian traders appear to trade more than any other country.Below, we compare the strengths of the five user-dominated exchanges in East Asia and the five user-dominated exchanges in North America and Western Europe. The market is strong enough to measure the number of times each currency is placed on a stock exchange before it closes, so this helps you understand how many exchanges a client has how to hold and trade.

Over the past year and several time periods, the trading volume of East Asian stock exchanges was 1.4 to 3.8 times that of North American stock exchanges.The market frequency of East Asian cryptocurrency users is higher than that of North American consumers, who prefer to buy and hold.

However, although the specialty market is still in East Asia, East Asia remains one of the largest retailers in the world.Because countries like China, Japan and Korea already use it every day. Why is this happening? Krishna Sriram, Director of Cooperation at Japan-based cryptocurrency security firm QuantstampThis is due to the existing electricity bill.In an interview, he said: “As cryptocurrency has become popular, services like Alipay in China and Korea have become very popular, so the concept of cryptocurrency has not seen huge success. . "" There isn't a lot of advancement in electronic payments, but we've also seen strong growth in Japan as Japanese companies see the value of cryptocurrencies and start mining. soon recovered in Japan. "

However, compared to other regions, the East Asian cryptocurrency market has slowed down over the past 12 months.

Although East Asia is still the largest cryptocurrency market, East Asia's participation in all operations has declined since October 2019.We asked Dovey Wan, an expert in the field and looking for a partner at Primitive Ventures, why this is happening. One of the reasons he mentioned was the aftermath of the PlusToken scandal. PlusToken is a so-called Ponzi scheme that has brought in over $ 2 billion in cryptocurrency to millions of victims, mostly in Asia. Wan said this affected the optimism surrounding cryptocurrencies in the region.

Wan told us.Many cryptocurrency traders have abandoned their holding plans due to the uncertainty of the Chinese government's cryptocurrency plans.In October 2019, as East Asia's share of the global cryptocurrency market began to decline, Chinese President Xi Jinping said China could declare the digital renminbi. This means that the digital model of the Chinese national currency has its own blockchain, also known as the central bank digital currency (CBDC), so that the government may or may not accept the new currency. “Essentially, Xi Jinping is talking about 'blockchain' but not 'bitcoin'. It kills them,” he said. These assumptions affect the release of new coins, as traders believe it is safer to start an average blockchain periphery than to start a new cryptocurrency or exchange.

Stablecoins are widely used in East Asia (especially Tether / USDT).

As mentioned above,Stablecoin usage in East Asia in particular is high, accounting for 33% of the value of each market share in the chain.However, this share has risen sharply in recent months, and Tether (a popular stable pegged to the US dollar) overtook Bitcoin in June 2020 to become the most popular cryptocurrency in East Asian residences.

Tether is now the most stable exchange in East Asia, accounting for 93% of all exchange transactions in the region.

As noted in the 2019 Asia-Pacific report, the popularity of the stable coin in East Asia is largely due to the decision taken in 2017 by the Chinese government to restrict direct trade between the two countries in renminbi for renminbi. cryptocurrencies. So buckle upBeing a fiat currency for Chinese cryptocurrency users is also an important aspect of accessing Bitcoin and other cryptocurrencies.Exchanging RMB to Tether is not allowed under this restriction, but it is still possible for users to purchase Tether through other means, such as using an external exchange or a foreign currency. For example, by using Tether instead of fiat instead of Bitcoin, traders only need to convert another currency to Tether, leaving Tether in their wallet or exchanging money, and blocked on their income. On the other hand, the value of Bitcoin fluctuates so much that it is impossible to train. You can see it in the figure below comparing the most popular fiat-crypto (Tether to fiat) exchanges on the exchange in China, Japan and South Korea.

Paolo Ardoino, CTO of Tether, said: “The Tether token is not a panacea or a replacement for fiat money.The exchange, the use of data has increased where financial assets are scarce.The Tether Token might not be the best place to buy coffee, but fast, deep-water, low-cost, and stable-price Tether token payments offer cryptocurrency traders, money changers, loans and people living in fiduciary jurisdictions poor security. time. "

Quantstamp's Krishna Sriram tau hais tias:End users in East Asia or emerging markets in East Asia use Tether as a value retailer and also for cross-border remittances.As we will see in more detail later, some international payments may represent flights from countries such as China.

When I spoke to Dovey Wan about the small volume of Tether used in East Asia, he agreed that it was important to ban RMB trading and also highlighted the benefits of Tether for the modern market. “In China, Tether has become a currency exchange for many people. Many Chinese businesses and traders, especially foreign ones, are now accepting Tether from their customers, ”he said. If you don't know the address of the companies that accept Tether exchanges, you might not know what your current usage is, but that could indicate that most Tether exchanges are concerned with marketing.In practice, however, this implementation appears to pass through the Tether era, demonstrating the stable ability to be the medium of exchange.

But all of this raises questions. Why choose Tether over other stable coins pegged to the US dollar?Many crypto enthusiasts in China have always supported Bitfinex and their parent company also owns Tether. Among these influencersMany of them have become fastener wholesalers, selling stablecoins to a large network of retailers across China. The merchants in this store sell Tether to the public.“It was very explosive,” Wan said. "Most of the time, there are in-store stores everywhere, and they've made it easy to use Tether every day for years."

East Asia, China, frequently exchanges cryptocurrencies with other regions.

It can be said that East Asia is an important area for the global cryptocurrency market.Its transaction volume is 78% higher than that of the second trading zone, it has sufficient capacity and sends more cryptocurrencies to the world than any other region.

Let's explore the relationship between East Asia and beyond.

East Asia is the world's largest cryptocurrency market, but in addition to regional trade, trade with other regions is also active.Over $ 50 billion has moved from one location in East Asia to another, compared to over $ 38 billion in Western Europe. Some of them were also made with the fine mining of East Asia. A significant portion of new cryptocurrencies in East Asia will be heading to North America and Western Europe, which makes sense as it is the second largest cryptocurrency market. However, we believe that at least some of these activities are indicative of investment from China.

The Chinese government allows citizens to send less than US $ 50,000 per year abroad. Historically, wealthy citizens have invested in real estate and other assets from abroad, sometimes using shell companies. Although the government has banned some of these practices, the status of cryptocurrencies may still go beyond government censorship.Cryptocurrency uses crypto technology to determine the leakage capital.

Over the past 12 months, we have seen over $ 50 billion in cryptocurrency exchanges from overseas East Asian destinations due to the China-US trade war and the downturn. of the yuan economy.Of course, not all are aircraft investments, but you can think of $ 50 billion as the maximum restriction on investment flights from East Asia to other areas of the cryptocurrency. .

We have also seen stablecoins become a major part of East Asian cryptocurrency exports. As explained above, this is not surprising, as stablecoins have become more popular in East Asia compared to other regions (especially Tether). The stable price of fiat currencies is particularly beneficial for capital flight, as stable currency means that users can sell more value in exchange for their fiat currencies. Thus, a stable profit also maintains its efficiency when finding customers. There are big changes. Philip Bonello, Research Director at Grayscale, reports that in addition to other forms of cross-border remittance, consumers in many areas are also using fixed benefits to move money. "According to rumors,Users in many areas appear to have used stationary coins to obtain US dollars for cross-border payments, currency transfers, and local currency transactions.. "He told us.

Considering the potential of Stabilitycoin for capital flight and Tether, now the most popular stablecoin in East Asia, let's take a look at the number of Tether transfers from East Asian locations to overseas at over the past 12 months.

In total, more than $ 18 billion of Tether has moved from locations in East Asia to locations in other regions in the past 12 months. Again, none of this would be capital flight.Most will be associated with mining operations., because I've heard rumors that miners or participants in China often transfer their new assets to Tether and then refer to major exchanges in the region. However, the spike in the volume of foreign remittances seems to affect the news in China regarding cryptocurrencies, which remains very interesting.The first incident happened around October 25, shortly after Chinese President Xi Jinping made the above statement, saying China may soon launch its own cryptocurrency.As Dovey Wan explained, these remarks could limit China's dependence on cryptocurrency to some extent. Because it indicates that the cryptocurrency market and cryptocurrency membership opportunities will decrease. Maybe this has prompted parts of the Chinese cryptocurrency community to move foreign currencies?

The second rally occurred around March 17, when the price of Bitcoin fell below $ 5,000 from around $ 9,100 the week before due to uncertainty over the new currency, and then started to fall. to sort out. Currently, the US and Chinese commodity markets are still weak, and the yuan itself is weak.Turbulence in the market will cause an influx of capital to China, but most exchanges for Tether may be from East Asian-based cryptocurrency traders transferring their insurance holdings to China. .

Of course, these spikes can also interfere with arbitrage trading.Leonardo Real, Tether's chief compliance officer, said there will be occasional penny changes when the price of Tether does not rise to $ 1 and when the price of the cryptocurrency changes. When this happens, investors in the underlying sector will be encouraged to sell Tether at a higher price to close the profit gap. He also said that Tether trades at different exchange rates that operate in different areas, and some traders are setting up funds in multiple exchanges to take advantage of the varying prices for arbitrage. Since Tether is primarily a liquid distributor, these business and market demand for Tether may be responsible for two major increases for Tether over the past year.

Tether's Ardoino described how the benefits of the general market advertising journey make it difficult to track similar relatives of Tether's usability. Our direct customers are key customers. Whenever a price changes one way, they are encouraged to stabilize the price by competing with the market. In this sense, participating large companies can receive Tether tokens. Instead, it can be redeemed at a 1: 1 ratio, creating a transparent, business-focused security mechanism. Although middle class participants were not identified by Tether, there are plenty of reasons for using Tether tokens, including trading, money transfer, merchant services, and more. how to use. "

Economic ties between East Asia, Africa and Latin America have also strengthened.Although both are small companies in East Asia, East Asia is the largest and third-largest exporter in Latin America and Africa, making it the larger of the two crypto currencies of that country. Some of them, especially in Africa, represent international exports, but interviews showed that they largely represent the business environment of Chinese companies and their customers, the use of equipment and regional partners. Luis Pomata, co-founder of Paraguayan stock exchange Cripex, said many Latin American companies have used cryptocurrencies to pay Chinese immigrants and sell them. Ray Yousseff, founder and CEO of the peer-to-peer business name Paxful, spoke of a similar industry in Africa.

Sometimes overseas Chinese investors are responsible for other cryptocurrency markets.Dovey Wan said Chinese cryptocurrency miners mine in parts of Africa that have cheap hydropower, and some are in non-crypto markets such as jewelry mining.

More importantly, it shows the importance of East Asia to the global cryptocurrency market. As for China, the Chinese government is using these plans to invest in international development projects in order to expand it globally. Data shows the government plays an unreliable role in supporting the achievement of trade goals, even though it is involved in cryptocurrencies.