- DeFi coins have benefited massively from the latest Chinese crypto ban, while Chinese coins have suffered
- HT, FIL, and OKB has dropped while UNI, SUSHI, IDEX, and 1INCH have rocketed
- It remains to be seen whether Chinese users will actually start to use them
China’s categorization of cryptocurrency transactions as illegal, affirming their stance from 2017, has had a polarizing effect on the cryptocurrency markets. While Chinese tokens such as Huobi Token (HT), Filecoin (FIL), and OKB have plummeted, tokens belonging to DeFi exchanges have cleaned up, with DXDY, Uniswap (UNI), and IDEX being the big winners. This reflects the shift from centralized cryptocurrency exchanges to decentralized ones, with reports emerging that Chinese crypto users are actively seeking ways to continue trading rather than obeying the government’s demands.
Huobi Forced to Clamp Down on Chinese Users
Despite chiefly reinforcing what was already known in the space, China’s ‘announcement’ of a ban on crypto trading still impacted the market, particularly so the Chinese coins:
The performance of the HT token is not surprising after the exchange banned new registrants from mainland China on Saturday before on Sunday declaring that it will “retire” existing mainland Chinese users by the end of the year. Binance issued their own statement, saying that it had not had any Chinese customers since China’s famous crypto ban in November 2017. By contrast to Chinese coins, DeFi coins enjoyed a lot of green:
Chinese blockchain journalist Colin Wu added that Chinese crypto trading groups had started discussing alternatives, with centralized exchange FTX apparently coming under consideration (although surely it won’t be long before they find themselves outlawed in China) but the biggest discussions were over which DeFi exchanges to use:
A large number of Chinese users will flood into the DeFi world, and the number of users of MetaMask and dYdX will greatly increase. All Chinese communities are discussing how to learn defi.
— Wu Blockchain (@WuBlockchain) September 26, 2021
Proof Will be in Trading Volume
While the value of DeFi exchange tokens have rocketed based on the anticipation that Chinese users will flock to them, the proof, of course, is going to be whether they are actually used by Chinese traders.
Uniswap, the biggest DeFi exchange by volume, didn’t report any usage spikes over the weekend, but it will be the weekly volume that will be the biggest clue as to whether Chinese users are actually shifting to DeFi exchanges in order to defy the government edicts.
