UNI Token Rises 20% as China’s Blanket Ban on Crypto Businesses Puts Focus on Decentralized Exchanges

Investors turn away from centralized exchanges in the wake of China’s blanket ban on virtual currency businesses.

Sep 26, 2021 at 7:25 p.m. UTC
Updated Sep 27, 2021 at 2:00 p.m. UTC

Omkar Godbole is the senior reporter on CoinDesk's Markets team.

Crypto investors seem to be betting that China’s latest blanket ban on virtual currency businesses will be a blessing in disguise for decentralized exchanges (DEX) facilitating direct peer-to-peer transactions without an intermediary.

That’s evident from the weekend’s market action. CoinDesk 20 data shows native tokens of major decentralized exchanges like Uniswap and SushiSwap have gained 22% and 18%, respectively, in the past 24 hours, leading bitcoin higher by a significant margin; meanwhile, centralized exchanges’ tokens are flashing red.

“The great rotation into everything decentralized is upon us and all thanks to the latest and undoubtedly most aggressive crypto ban by China,” Denis Vinokourov, head of research at Synergia Capital, told CoinDesk in a Telegram chat.

“Decentralized autonomous organization Maker’s DAI stablecoin will likely gain substantial market share versus tether as a result,” Vinokourov added, sharing a bullish outlook on underlying layer 1 and 2 programs supporting decentralized finance and non-fungible tokens, especially marketplaces.

On Friday, the People’s Bank of China (PBOC) declared all virtual currency-related activities illegal, banning offshore exchanges from serving mainland Chinese users. The statement also disqualified tether, the largest stablecoin globally, as legal tender along with bitcoin and ether, marking toughest crackdown to date.

Huobi has already taken steps to comply with new regulations, suspending new user signups from China. Reportedly Binance has taken similar actions.

Huobi said early today that it would gradually close accounts of existing China-based users by the end of the year. The Huobi token has dropped 17% in the past 24 hours to trade near $7.43. The cryptocurrency hit eight-month lows near $6 a few hours ago.

While UNI is leading the market higher, the token is still stuck in a four-week falling channel. A breakout might bring stronger chart-driven buying pressure.

CoinDesk - Unknown

UNI awaits breakout (TradingView)

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Omkar Godbole is the senior reporter on CoinDesk's Markets team.

CoinDesk - Unknown

Omkar Godbole is the senior reporter on CoinDesk's Markets team.

Trending

1
CoinDesk - Unknown
EBay Taps OneOf for Debut Sports-Themed NFT Drop

The release marks the online marketplace giant's first foray into digital collectibles.

The release marks the online marketplace giant's first foray into digital collectibles.

CoinDesk - Unknown
2
CoinDesk - Unknown
First Mover Americas: Fantom Surges 20% as Sparkster Questions Fly

The latest moves in crypto markets in context for May 23, 2022.

The latest moves in crypto markets in context for May 23, 2022.

CoinDesk - Unknown
3
CoinDesk - Unknown
Goldman Sachs Says DeFi’s Interconnections Can Increase Systemic Risk

Contagion risk related to UST’s depegging hit staked ether (stETH) because of Lido’s exposure to the Terra ecosystem, the bank said.

Contagion risk related to UST’s depegging hit staked ether (stETH) because of Lido’s exposure to the Terra ecosystem, the bank said.

CoinDesk - Unknown
4
CoinDesk - Unknown
ICO-Funded Project Sparkster Converts $22M in Ether to USDC After 3 Years, No Product

Sparkster promised investors a “no-code” software-creation platform using $30 million in funds raised from investors in 2018.

Sparkster promised investors a “no-code” software-creation platform using $30 million in funds raised from investors in 2018.

CoinDesk - Unknown