China just celebrated its biggest holiday – the Lunar New Year that took place last week. Not so long ago, China was a major force in the cryptocurrency world. But this year, Chinese New Year had no discernible impact on global crypto trade.
How would Chinese New Year affect trade volume? For one thing, Chinese people could transfer their crypto into cash during the festival. But this didn’t appear to be happening.
We looked at the transaction volume data of five well-known exchanges on Coinmarketcap, including Binance, Huobi, OKEX, Bitfinex and Coinbase, to observe the changes in the digital currency market during Chinese New Year, also known as the Spring Festival. It’s worth noting that, despite wash sales in these exchanges, we can still draw some basic conclusions.
During this year’s Spring Festival from Feb. 4 to Feb. 10, the total transaction volume of the five exchanges was $10.567 billion, and the total volume of the week before the Spring Festival (Jan. 28 to Feb. 3) was $10.497 billion. During the week of Jan. 21 to Jan. 27, total transaction volume was $9.807 billion. So total trade volume of these five exchanges increased by 0.67% from the week before and 7.75% from two weeks earlier, and there was no significant decrease in transaction volume.
It is essential to note, however, that exchange volume does not fully reflect the realities of mainland China’s crypto trade. China banned exchanges in late 2017, which means that mainland Chinese use over the counter (OTC) platforms to trade crypto for fiat currency.
But what does this data really tell us? Is it that China is shrinking in importance in the crypto world, or simply that holidays don’t really matter? Let’s take at what happened this past Christmas. During Christmas week (Dec. 24 to Dec. 31, 2018), the total transaction volume of the five exchanges was $20.822 billion, which was 3.57% lower than the week before and 98.81% higher than two weeks before that. In other words, there was no obvious decrease in transaction volume during Christmas season in 2018.
On the contrary, total volume was $13.722 billion during New Year week (Jan. 1 to Jan. 7), down 34.10% compared with the previous week, and up 9.74% compared with the following week.
Perhaps the moral of this story is simply that cryptocurrency is a truly global phenomenon, with trading activity spread across different regions and cultures. It is thus difficult for any one holiday to have a major effect on overall crypto trade volume.
