After the expansion of the ban on cryptocurrencies in China, the price of DEX tokens has grown significantly, and trading volumes in some DeFi protocols have exceeded the volumes of large centralized exchanges.
At the end of last week, the People’s Bank of China issued a circular expanding the ban on transactions with cryptocurrencies for businesses and recognized them as illegal financial activities. After this announcement, Bitcoin fell by 10% and many cryptocurrencies followed. However, the news had a positive impact on the DeFi industry.
According to CoinGecko, the price of DYDX, the dYdX protocol management token, increased by 35.9% per day and reached a historic high of $ 22.17. At the same time, the trading volumes of the decentralized exchange exceeded the same indicator on the Coinbase cryptocurrency exchange.
DYdX Founder and Former Coinbase Employee Antonio Juliano stated
on Sunday, which is pleasantly surprised by these results. DYdX surpassed Coinbase in trading volume for the first time, he said.
5 years ago I left @coinbase and eventually founded dYdX
Today, for the first time, @dydxprotocol is doing more trade volume than Coinbase pic.twitter.com/QzoKAUpH29
– Antonio | dYdX (@AntonioMJuliano) September 26, 2021
Following the posting on Twitter by Giuliano, trading volumes on dYdX continued to rise and surpassed $ 6.3 billion in the derivatives market and $ 3 billion in the spot markets. Over the past 24 hours, the trading volume on Coinbase has been about $ 3 billion. Other major tokens of decentralized exchanges are also growing: over the course of the day, the price of Uniswap (UNI) and SushiSwap (SUSHI) increased by 36% and 29%, respectively.
The rise in the price of DeFi tokens can be partially explained by the new provisions of China’s prohibitive policy. On Sunday, Chinese reporter Colin Wu wrote
tweeted that Chinese traders are looking for alternative ways to deal with cryptocurrencies, one of which is the DeFi industry. He predicts that “a large number of Chinese users will flood into the DeFi world, and the number of MetaMask and dYdX users will increase significantly.”
The giants of the cryptocurrency industry have reacted to the new bans of the PRC. Exchanges Huobi and Binance have suspended services for new traders from China, and Huobi plans to remove existing customer accounts. On trading floors, only registration is now available for customers from Hong Kong, a special administrative region of the PRC.
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