[btbuildem]

I've read a pretty lucid (for a change) analysis of this over at /r/bitcoinmarkets

The gist of it was that BTCChina's long game was to kill all competition (by being first, and zero fees), wait for the surge of new users to taper off (market saturation?), and start charging a fee once they've monopolized the market.

The OP further speculated that they must've interpreted the change of regulatory climate as disastrous, expect a major exodus, and have implemented trading fees to get at least some profit off the activity.

[TwoFactor]

The new fee structure seems more regulatory related. They did it overnight without warning, and right after the reported closed-door meeting. OKCoin the second largest CNY exchange followed suit and started charging fees. This would have been a great opportunity to capture market share if btcchina had made the decision without outside influence.

[muyuu]

Lots of black money in their market cannot be easily/quickly cashed out now anyway.

The fees were about to come. The timing is a bit puzzling but really it's been a while already since the announcements (in BTC time-scale a few weeks is a lot of time).

[TacticalCoder]

Interesting... In a correctly working market wouldn't the end result be that competitors prefer to lower their fees too and then offer other guarantees (security, etc.) in order to keep clients and to bring in new clients?

Or is the bitcoin exchange market a "winner takes all" market?

And if they "win" and start charging a fee, wouldn't it immediately open a new opportunity for someone to come up with a platform with lower fees?

(honestly asking... Btw I'm european and I'm on Bitstamp for trading Bitcoins)

[kolinko]

Just like auction houses - it's a winner takes all. The biggest exchange has the hughest volume and lowest spread.

As for competitors lowering their fees - one can onlly do it as long as it has funding to do so.

Here you can witness a perfect example of a free market economy leading to a suboptimal situation. And an example of usefullness of antitrust laws.

[ok_craig]

I think the 0% was just for usd/btc trades, and they already charged a fee for withdrawing, so I'm not sure that this makes sense.