A recent report from Chainalysis shows that cryptocurrency trading in the region has dropped significantly. Before, East Asia made up 8.8% of the cryptocurrency market, and it was expected to grow.
Governments in East Asia, especially China, have been making rules about cryptocurrencies, affecting the industry. China, in particular, banned various cryptocurrency activities in 2021 due to a rise in such activities. This ban included mining and trading.
The Chainalysis report suggests that China might ease up on cryptocurrency regulations in the future. There’s evidence of increased cryptocurrency trading in Hong Kong, a part of China. This signals that the government might be more lenient about cryptocurrencies.
This market also attracts big investors and wealthy individuals, leading to the rise of OTCs (over-the-counter trading). A representative from a Hong Kong OTC cryptocurrency company mentioned that many foreign users use OTC to move their assets out of local banks. Locals in Hong Kong also use it to have better control over their finances. The representative believes that even though a lot of investment is going into China, the government might change its stance on cryptocurrency trading.
Right now, China is the third country in East Asia for cryptocurrency trading volume, with South Korea and Japan ahead of it.