CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • Fund
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$35,230.00
  • ethereum
    ETH$1,346.70
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    Home » Crypto News » Centralized Exchanges Hurt as Chinese Investors Chase DeFi Gems

    Centralized Exchanges Hurt as Chinese Investors Chase DeFi Gems

    Author: Jordan Lyanchev

    Last Updated Sep 8, 2020 @ 13:02

    Chinese cryptocurrency investors are reportedly reducing the liquidity on centralized exchanges by locking their assets in return for yield farming rewards.

    According to a recent publication, Chinese investors are using a lot of the ETH they buy on centralized exchanges to pursue DeFi opportunities.

    This essentially reduces liquidity, and exchanges are forced to limit or even suspend withdrawals.

    DeFi Growth In China Causes Issues For Exchanges

    The DeFi craze exploded earlier this year. Projects began surfacing daily with new developments, promising high returns to lure investors into locking their cryptocurrency assets in their protocols.

    The total value locked (TVL) in such protocols skyrocketed from $500 million to its recent all-time high of nearly $9.5 billion in about six months.

    Interestingly, some reports suggest that Chinese investors were somewhat late to the party, having to bear the country’s conservative approach towards the digital asset industry. However, the TVL’s latest pump coincided with an ATH for DeFi searches on the popular Chinese social media platform – WeChat.

    Data provided by a local reporter confirmed the rapidly growing demand from Chinese investors towards DeFi. He noted that users have been buying lots of ETH, the most widely used token for swapping for DeFi coins, especially when the asset’s price tanked a few days ago.

    Investors use the purchased ETH and transfer it to decentralized exchanges (DEX) for farming. As a result, he concluded that the liquidity on centralized exchanges (CEX) is “falling frantically.”

    Decreasin Holdings On CEX Operating In China. Source: CryptoQuant
    Decreasing Holdings On CEX Operating In China. Source: CryptoQuant

    Exchanges Fight Back

    The reporter claimed that the exchanges are taking some radical measures to prevent further declines in their liquidity.

    A few days ago, users experienced “difficulties in withdrawing coins,” and even shutdowns as CEX operating in China limited and, in some cases, entirely suspended withdrawals for undisclosed periods. The Chinese community reportedly reacted by launching a “coin withdrawal campaign,” urging investors to withdraw all of their cryptocurrency holdings from the exchanges and delete their accounts.

    Following the latest developments, CEX reversed their approach. The reporter asserted that they started to list numerous DeFi tokens to “make users gamble in the secondary market, and helping users with yield farming.”

    Enjoy reading? Please share:
    Facebook Twitter LinkedIn Telegram
    SPECIAL OFFER (Sponsored)
    Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

    PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.

    You Might Also Like:

    • binance_open_interest
      Binance Births Centralized 'DeFi' with Launch of BSwap Automated Market Maker
    • 4 Things That Could Cause the DeFi Bubble to Pop
    • synthetix_cover
      Unraveling DeFi: An Interview With Synthetix About How Synths Work
    Read more on: China DeFi

    About The Author

    Jordan Lyanchev View more posts by this author

    Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

  • bitcoin
    BTC$35,230.00
  • ethereum
    ETH$1,346.70
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    ADVERTISEMENT
    binance
    Bitcoin Editorials
    Ethereum 2.0 Staking on Exchange vs. Creating Your Node: What You Need to Know

    Ethereum 2.0 Staking on Exchange vs. Creating Your Node: What You Need to Know

    5 Possible Reasons For Bitcoin’s Price Surge Over $30,000

    5 Possible Reasons For Bitcoin’s Price Surge Over $30,000

    2020 Year In Review: Bitcoin’s Journey From $3800 To Nearly $30K

    2020 Year In Review: Bitcoin’s Journey From $3800 To Nearly $30K

    6 Reasons For The Ongoing Bitcoin Bull-Run Beyond $20K

    6 Reasons For The Ongoing Bitcoin Bull-Run Beyond $20K

    Is Blockchain The Answer To COVID-19 Led Misinformation and Rumor Mongering?

    Is Blockchain The Answer To COVID-19 Led Misinformation and Rumor Mongering?

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    About
    Advertise on CryptoPotato
    About Us | Contact Us

    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Cannabis Stocks News | Market Analysis
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!