China’s secret crypto trade blossoms while its stock markets bleed

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Last Updated on 19 January 2024 by CryptoTips.eu

It was quite striking to read two financial stories from China this week juxtaposed against each other. Firstly, there was the report that the Chinese stock markets are at their lowest level in about five years (the European and American stock markets also didn’t have a stellar start to 2024) and secondly, the Wall Street Journal shed light on the blossoming crypto trade in the Chinese port cities, a market that’s apparently growing and flourishing.

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Iowa

China banned crypto trading in 2021 and ever since then, the illegal and underground trade in digital coins has grown rapidly. Last year people took the train from Shanghai to Hong Kong to convert their Yuan into Tether in order not to lose value (or to invest in Bitcoin, the Chinese of course know what the halving historically does to the price of crypto’s largest coin), but now that the Chinese stock markets are crashing, crypto investment continues to soar.

Chinese real estate is not doing much better (recall what happened to real estate giant Evergrande last year) and with a declining birth rate it seems that it may take a while before the Chinese economy recovers.

Amid all this was Donald Trump’s victory in Iowa this week, the first state to vote for a Republican presidential candidate. It was striking to see how negatively the stock exchange in Shanghai reacted. Knowing that Trump (if he becomes president of the USA again) will probably impose import duties on Chinese products, it is of course not too surprising that Chinese investors are not too keen on him winning.

VPN

But crypto investments in China are going strong apparently.

Thanks to the use of a VPN (virtual private network) to mask their IP address, thanks to technology to change their location, thanks to secret meetings in laundromats and cash payments, small Chinese investors have managed to move some $86 billion in crypto in the past year, Chainalysis recently calculated. That’s a massive amount for a country where crypto trading is officially banned of course.

It therefore seems that Xi Jinping’s ban on crypto trading is no longer respected. The Chinese might become ready to compete with the South Koreans and the Japanese, who have been pumping billions of savings into crypto every year for some time already.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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