Chinese are buying bitcoins due to weak stock market dynamics – Kommersant

According to the agency Reuters, Chinese retail investors are actively moving funds into Bitcoin and other cryptocurrencies, despite their ban in the country since 2021. Investors are doing this because of weak stock market performance in a country where the economy is still struggling to recover from the COVID-19 pandemic.

One such investor told the agency that “Bitcoin is kind of like gold here now, it’s a safe asset.” To purchase cryptocurrency on the gray market, cards of small regional banks are used; the amount of a one-time purchase does not exceed 50 thousand yuan (about $7 thousand), so as not to attract the attention of the supervisory authorities of the PRC. To purchase cryptocurrency, Chinese citizens also use accounts with a limit of about $50 thousand in Hong Kong, where Bitcoin is not recognized as a means of payment, but trading is not prohibited.

According to Chainalysis, despite the ban on cryptocurrencies in mainland China, from July 2022 to June 2023 alone, trading there amounted to $86.4 billion, surpassing even Hong Kong with a turnover of $64 billion during the same period. A top manager at a Hong Kong crypto exchange, speaking on condition of anonymity, told Reuters that the slowdown in the Chinese economy “has made investing in mainland China risky and unpromising, so people are looking for other ways to invest their funds. Almost every day we see new investors coming to us from mainland China.”

Read about the situation on the cryptocurrency market in the Kommersant publication. “Investors have abandoned Bitcoin”.

Evgeny Khvostik