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Despite the ban, China’s cryptocurrency market is booming as investors look for “safe” alternatives.
In his last analysesRenowned cryptocurrency expert Lark Davis delved into China’s significant influence on the global cryptocurrency market, particularly in light of recent developments in the country’s financial policies.
China’s announcement to issue $140 billion in long-term bonds has captivated global investors. These 50-year bonds aim to address pressing economic issues such as government debt, housing challenges and subdued consumer spending.
Comprehension The Chinese cryptocurrency market
Despite China’s cryptocurrency ban, Davis reveals a thriving cryptocurrency market within the nation. Data from Catenaanalysis shows an impressive raw transaction volume of $86.4 billion recorded in China between July 2022 and June 2023, surpassing Hong Kong’s trade figures.
Notably, China boasts a higher percentage of large retail transactions than the global average, indicating robust activity in the cryptocurrency sector.
Bitcoin ETFs shine in Hong Kong
The upcoming launch of Bitcoin Exchange-Traded Funds (ETFs) in Hong Kong, with accessibility expanded to mainland China via Stock Connect, represents a significant opportunity. Davis suggests this development could fuel greater demand for cryptocurrencies, as Chinese investors seek alternative assets amid real estate market challenges.
Bitcoin and gold emerge as preferred investment options amid economic uncertainties.
Rise of Bitcoin in China
Demand for Bitcoin in China has grown as other investments struggle. Bitcoin is up 50% since mid-October. China’s stock market has been the world’s worst, with the CSI index down 35% in three years and corporate earnings falling short of forecasts for ten quarters. Once seen as a safe bet, the real estate market is also in crisis. As a result, Chinese investors are turning to Bitcoin, considering it a safe haven.
Insights from industry players:
- Michael Wang, cryptocurrency trader: Wang highlights the large daily volumes, reaching millions of yuan, indicating China’s strong interest in cryptocurrencies.
- Charlie Wong, equity analyst: Wong speculates that Chinese authorities are indirectly supporting cryptocurrency trading in Hong Kong to maintain a presence in the thriving cryptocurrency markets of Singapore and New York.
Is Bitcoin really the future of finance? Tell us what you think.
Also check: Top reasons why the cryptocurrency market is down today