It’s almost one month now since the Big Three bitcoin exchanges announced the halting of bitcoin withdrawal announced on 9th Feb. Investors have been anxiously waiting for any update from the exchange. Suspension of bitcoin withdrawal is not direct order from regulators, but more as a sign of obedience to the authority. There are several factors that might affect the decision of exchanges.

The Two sessions (3rd-13th March)

The fifth sessions of the 12th National People’s Congress (NPC) and the 12th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), also known as the “two sessions,” are expected to end on 13th March. During the “two sessions”, social order and security are the priority of all local police forces. It happened before that some p2p lending platform went broke and victims gathered in front of local government to protest. Such commotions are strictly monitored during the two sessions as it is regarded as a disgrace to local authorities.

As bitcoin demand for immediate withdrawal is mostly driven by the “ MMM Republic of Bitcoin” at the moment, the majority of speculators are happy with the price floating within exchange. If MMM loses its traction on gaining new members or bitcoin price crash, large crowd of victims may march on street.

Screenshot of MMM website

PBoC Regulation

A joke among the bitcoin circle in China is that if government is assigned to manage desert, sand will be in scarcity in two years. A good example is the housing price in China. Every time the government release some regulations like forbidding non-local residents from buying houses, people know that the housing price are protected and will not fall. It has been proved in the past two decades. After the PBoC FUD fades away, people may realize that bitcoin could well fit in the “more regulation, more protection” category.

But not everyone is just waiting for things to happen.

A shanghai-based exchange Freewillex announced that user may withdraw BTC starting from 1st March, imposing a 5 BTC daily limit and an annual cap of 10 BTC. As it’s a new exchange, the order book went nuts in a short while. But today the exchange has almost zero transaction volume.

OTC Hedging

Is there a way to withdraw bitcoin from exchange? The answer may lies in OTC hedging. As per a thread on 8btc forum, a user disclosed how he managed to get access to real coins via OTC trading. The OP had 2.1 BTC stuck in the exchanges. His original plan was to wait for a month. However, his concern kept on growing as Bitcoin inching its way to gold parity. Then he came up with a plan. First he bought 2.1 BTC via OTC trading at the price of 8211 CNY. Then he created a selling offer on the exchanges at the same price. The order was finally taken last Friday. His next move was to withdraw CNY immediately from the exchange. He was lucky to swap the stranded coins via OTC trading.

Will the Big Three allow bitcoin withdrawal this month? Probably not because the status quo is acceptable.