Chinese buyers stay resolute of their pursuit of Bitcoin, regardless of the government’s ban since 2021. Bitcoin continues to draw substantial funding from Chinese capital, as Reuters reports right now.
Mainland China Is Still Buying Bitcoin
Dylan Run, a finance government in Shanghai, epitomizes this development. Concerned about China’s financial outlook and the sluggish home inventory market, Run ventured into Bitcoin in early 2023.
As detailed within the Reuters report, he employed an astute technique, using financial institution playing cards issued by rural banks and maintaining every transaction beneath 50,000 yuan ($6,978) to evade regulatory scrutiny. In his view, “Bitcoin is a safe haven, like gold.” Run has now allotted practically half of his funding portfolio to BTC, which has surged closely, outperforming China’s ailing inventory market.
Remarkably, Run’s journey displays a broader motion amongst Chinese buyers who’re actively searching for unconventional pathways to entry Bitcoin. The Reuters report highlights that Chinese Bitcoin buyers function inside a regulatory grey space, as cryptocurrency buying and selling is formally banned in mainland China, and strict controls govern capital flows throughout borders.
Despite these constraints, Chinese buyers persist in buying and selling Bitcoin on offshore exchanges reminiscent of OKX and Binance, or through over-the-counter channels. Additionally, as famous within the Reuters report, Chinese residents have ingeniously leveraged their $50,000 annual overseas trade buy quotas, sometimes reserved for abroad journey or training, to fund BTC accounts in Hong Kong.
This phenomenon is pushed by a rising urge for food for diversification amid China’s financial uncertainties. One investor succinctly expressed the sentiment, stating, “Given the economic climate in China, exploring alternative investments like cryptocurrencies has become a necessity.”
Bitcoin, together with different digital property, has emerged as a sanctuary for these buyers as they navigate China’s advanced financial panorama. Importantly, this development extends past retail buyers. Chinese monetary establishments are additionally exploring alternatives inside the cryptocurrency sector, as highlighted within the Reuters report.
An government from a Hong Kong-based cryptocurrency trade underscored the rationale, stating, “Faced with a sluggish stock market, weak demand for IPOs, and contraction in other businesses, Chinese brokerages need a compelling growth narrative for their shareholders and boards.”
Off-Shore Crypto Exchanges Facilitate Trading
As the report observes, entry to Bitcoin stays comparatively accessible inside mainland China. Off-shore crypto exchanges like OKX and Binance proceed to supply their companies to Chinese buyers, offering steering on changing yuan into stablecoins by way of fintech platforms like Ant Group’s Alipay and Tencent’s WeChat Pay.
Chainalysis, a cryptocurrency knowledge platform, make clear the extent of this resilient exercise. Contrary to the regulatory ban, the report reveals that crypto-related actions in China have surged.
China’s international rating by way of peer-to-peer commerce quantity skyrocketed from 144th in 2022 to thirteenth in 2023. Astonishingly, the Chinese crypto market recorded an estimated $86.4 billion in transaction quantity between July 2022 and June 2023, far surpassing Hong Kong’s $64 billion in crypto buying and selling. Notably, the proportion of enormous retail transactions, starting from $10,000 to $1 million, practically doubled the worldwide common of three.6%.
According to Chainalysis, the developments “have created speculation that the Chinese government may be warming to cryptocurrency and that Hong Kong may be a testing ground for these efforts.”
At press time, BTC traded at $40,268.
Featured picture created with DALL·E, chart from TradingView.com
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