DeFi and DEX volumes soar amid China`s crypto ban and ongoing US regulation

Last week China’s heavy-handed crackdown on crypto trading crypto briefly sent shockwaves across the market as Bitcoin and altcoin prices saw a sharp drop following the announcement, but as is the case with all things crypto-related, the market bounced back as resilient traders found other ways to participate in the market. 

Part of China's goal in limiting citizens ability to trade cryptocurrency seems focused on discouraging the use of cryptocurrencies and the growing decentralized finance (DeFi) ecosystem but these maneuvers appear to be having the opposite effect as the token price and protocol activity for projects like Uniswap (UNI) and dYdX have seen an uptick since the crackdown began.

According to data from Chainalysis, there has been a significant amount of regional Bitcoin (BTC) flows happening within eastern Asia, as highlighted by the tall orange bar in the graph below. This suggests that crypto holders in the region have been shifting around their holdings in response to the regulatory crackdown.

As stated by Chainalysis, “assets typically flow within a region, likely due to preferences for local exchanges, but flows between regions often occur as a result of regulatory concerns, geopolitical changes, or significant market price variations.”

The lack of flows out of Eastern Asia combined with crypto exchanges like Huobi and Binance suspending services for Chinese residents suggests that funds are being kept within the region, but not on centralized exchanges.

Kaynak:cointelegraph.com