CoinDesk has added two exchanges, LakeBTC and Huobi, to its US dollar Bitcoin Price Index (BPI) and Chinese yuan BPI, respectively.
These additions will be live as of 16:00 BST today, the 30th June.
The move reflects the significant volumes traded by the exchanges and the importance of the Chinese market in terms of USD/BTC trading.
LakeBTC cracks the top four USD-exchanges
CoinDesk has been closely monitoring Shanghai-based LakeBTC in recent weeks. LakeBTC reports an even split between domestic and international customers, and it offers bitcoin trading in both USD and CNY, with the latter being commission free.
The company's self-reported total USD trading volume has grown to represent a significant portion of the global total. Over the last 30 days, LakeBTC exchanged 101,229 bitcoins (units), placing it in the number four position in the total USD volume league table, behind Bitfinex, Bitstamp, and BTC-e (Table 1).
Table 1: Top Four USD-BTC (units) Exchange Volume over last 30 days
|Rank||Exchange||30-day BTC Volume (units)||Share of Top 4 Exchanges|
Source: Bitcoincharts.com (as of 25th June, 2014)
CoinDesk has also verified that LakeBTC meets the CoinDesk BPI criteria, which includes rules ranging from minimum trade size to maximum customer withdrawal delays.
Huobi added to Chinese yuan Bitcoin Price Index
In March 2014, in recognition of the growing importance of the Chinese bitcoin trading volume, CoinDesk launched a new Chinese yuan Bitcoin Price Index.
The Chinese yuan BPI is calculated independently from the widely referenced CoinDesk US dollar (USD) BPI, and is based solely on yuan-denominated bitcoin trading volume.
However, one other well-known Chinese exchange, Huobi, had self-reported trading volume in March which supported its inclusion in the CoinDesk BPI, and its reported trading volume continues to be quite significant compared to its peers (Figure 1).
Figure 1: Trading Volume Share – CNY BPI Component Exchanges
Back in March, CoinDesk felt more time was needed to obtain additional information about Huobi's business before we were comfortable including it in the BPI. Since then, Huobi has been much more open about its business operations and we are pleased to now add the exchange to our Chinese yuan BPI.
With the addition of Huobi and LakeBTC, there are now a total of seven exchanges across both the USD and CNY BPIs (Table 2 and Figure 2).
Table 2: Trading Volume (BTC units) at USD BPI and CNY BPI Component Exchanges
|Market||BTC volume (units)||% of Total|
Sources: Bitcoincharts.com, BTCkan.com (as of 26th June, 2014)
Figure 2: Trading Volume Market Share of USD BPI and CNY BPI Component Exchanges
Chinese bitcoin market evolves, continues ascent
During a presentation at the March 2014 CoinSummit conference in San Francisco, CoinDesk forecasted that China's importance to the overall bitcoin economy would continue to increase.
Our last change to the USD BPI was the addition of Hong Kong-based Bitfinex on the 13th of March, 2014, which has now surpassed Europe-based Bitstamp in total USD trading volume over the last 30 days (Table 1).
Coupled with Shanghai-based LakeBTC's rise in USD trading, a very significant portion of total USD bitcoin trading is now taking place inside China.
Further, 90% of the combined CNY and USD BPI volume is occurring at China-based exchanges (Figure 3).
Figure 3: CNY and USD BPI Trading Volume Share at China and Rest of World (ROW) Based Exchanges
Why is such a large share of bitcoin trading volume taking place at China-based exchanges, and will this continue in the coming months? Are these bitcoin exchanges being used to avert Chinese capital control rules? Given the ease with which servers can be relocated does the notion of a 'China-based' bitcoin exchange make sense? Share your thoughts in the comments below.