Amid economic downturn, Chinese investors flock to banned Bitcoin in a rush for investment opportunities.
China’s residents are finding creative ways to convert their savings into cryptocurrencies, such as Bitcoin (BTC), despite the country’s ban on these digital assets. While mainland China strictly controls the movement of capital and prohibits cryptocurrency trading, individuals can still access crypto exchanges like OKX and Binance, as well as use over-the-counter channels. Additionally, Chinese investors can open overseas bank accounts to purchase crypto assets.
Since Hong Kong approved digital assets last year, Chinese citizens have been utilizing their $50,000 annual currency purchase quota to transfer money into cryptocurrency accounts in the region. The economic downturn in China has made mainland investments risky and disappointing, prompting people to seek offshore options.
In 2017, China closed its local cryptocurrency exchanges, effectively shutting down the speculative market that accounted for 90% of global Bitcoin trading. More recently, in September 2021, the Chinese government implemented a complete ban on all cryptocurrency transactions. However, despite these government restrictions, mainland China residents have continued to be active crypto users, as noted by Chainalysis experts. Hong Kong serves as a testing ground for China’s potential reconciliation with cryptocurrencies.
From July 2022 to June 2023, Hong Kong ranked fifth in terms of cryptocurrency transaction volume, with approximately $64 billion. It trailed behind South Korea, Japan, China, and Taiwan. Analysts have highlighted that Hong Kong’s transaction volume is comparable to that of China, despite its much smaller population. The majority of the volume in the region comes from large institutional transactions of $10 million or more.
Overall, Chinese residents have found ways to navigate the country’s cryptocurrency ban and actively participate in the crypto market, utilizing platforms like Hong Kong to invest their savings.
