Chinese Investors Turn to Crypto Amid Economic Downturn
In the face of China’s economic downturn and a sluggish stock market, Chinese investors are seeking refuge in the crypto market as a safer alternative to traditional investments, despite the government’s ban on cryptocurrencies. They are finding creative ways to enter the market and fueling a thriving underground industry.
Mainland investors can trade tokens like Bitcoin on platforms such as OKX and Binance, as well as engage in over-the-counter transactions. Additionally, Chinese citizens are utilizing their $50,000 annual forex purchase quotas to move money into cryptocurrency accounts in Hong Kong.
As a result, the Chinese crypto market has experienced a surge in activity, with its global ranking in peer-to-peer trade volume skyrocketing. Between July 2022 and June 2023, the Chinese crypto market recorded an estimated $86.4 billion in raw transaction volume, surpassing Hong Kong’s $64 billion.
Thriving Underground Crypto Market in China
The underground crypto market in China is flourishing, with brick-and-mortar crypto exchange stores emerging in Hong Kong’s bustling business and shopping districts. These offline shops operate with minimal regulations, allowing customers to purchase cryptocurrencies without providing identity documents. Dealers facilitating digital asset purchases report daily volumes reaching millions or even tens of millions of yuan.
Despite the ban on crypto trading, Chinese officials seem to recognize the disruptive potential of Bitcoin and its growth prospects. Their endorsement of crypto trading in Hong Kong allows China to maintain a presence in the booming global crypto business.
Tech Giants in China Push into Web3
Tencent and Huawei, two major Chinese tech giants, are making notable progress in the Web3 space despite strict regulations on cryptocurrency trading in China. They recently exhibited their booths at the Staking Summit in Istanbul, a conference focused on proof-of-stake (PoS) protocols.
Over the past year, Chinese tech giants like Alibaba, Tencent, and Huawei have been increasingly visible in various crypto events worldwide. Although their participation is limited due to China’s cryptocurrency ban, they are leveraging their computing resources to support web3 startups, similar to how they provide cloud services to established tech verticals.
Hot Take: China’s Crypto Market Defies Ban with Impressive Transaction Volume
In defiance of the government’s ban on cryptocurrencies, China’s crypto market has recorded an estimated $86.4 billion in raw transaction volume between July 2022 and June 2023. This surpasses Hong Kong’s crypto trading volume during the same period. Chinese investors are finding innovative ways to participate in the market, fueling a thriving underground industry. Despite minimal regulations, brick-and-mortar crypto exchange stores have emerged in Hong Kong’s business districts. Chinese officials appear to recognize the growth potential of cryptocurrencies and are endorsing crypto trading in Hong Kong to maintain a foothold in the global crypto business. Tech giants like Tencent and Huawei are also making strides in the Web3 space, leveraging their resources despite regulatory restrictions.
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