China has always been in the spotlight when it comes to cryptocurrencies, despite the country’s controversial legislation on the matter.
Last year, President Xi Jinping urged for further investments in blockchain-based technology, causing Bitcoin to mark an increase upwards of 40% in less than 24 hours. Now, however, regulations seem to be tightening up, and this will cause some changes in the cryptocurrency landscape, according to Changpeng Zhao, CEO at Binance.
Cryptocurrency Operators To Consolidate in China, CZ Says
According to a report from local news media South China Morning Post, the virtual asset market in Asia, which is currently fragmented, draws further regulatory scrutiny.
Purportedly, this would increase mergers and acquisitions in the field, and their numbers are already going up. While the number of M&A deals fell 40 percent to 114 and the US accounts for half of them, Asia’s share increased to 22% from 14%. The acquisition of the popular data monitoring resource CoinMarketCap by Binance added up to the list.
“In Asia, we are interested in exchanges that have existing banking relationships, which enable them to accept trading in local fiat currencies,” commented CZ.
Moreover, the executive also expects that there will be a consolidation as the higher regulatory requirements will make it more challenging for smaller exchanges to survive.
Interest Spiking Following March Madness
March was a landmark month in the history of Bitcoin. Its price went down to $3,600 in less than 48 hours, marking one of the sharpest declines in history. The cryptocurrency has since recovered to where it currently trades at around $7,300.
Massive volatility, however, also drives an increasing trading interest as users attempt to capitalize on the vicious swings in price.
The daily turnover of bitcoin reached a record of $75.9 billion on March 13. Reportedly, this had cash-rich cryptocurrency exchanges to start considering acquisitions of smaller rivals and invest in new businesses.
Zhao said that they “usually spend about a quarter of our profit on investment opportunities every year, as we grow our portfolio of businesses beyond just trading.”