Chinese Traders Unaffected by Crackdowns

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In the past few months, China has been cracking down on Bitcoin and cryptocurrencies hard. The increased interest in cryptos and sky-rocketing BTC surge have alarmed the government about the potential of fraud, trading losses, and money laundering. However, for all the crackdowns, the Chinese government has failed to enforce a full ban since the peer-to-peer transactions have been very hard to track down.

The global crypto market has been concerned about the plunge in Chinese buying power over the last 6 months. In mid-may, China saw a massive $1 million sell-off in digital assets. In a time where the world has never been more interested in Bitcoin, China is going the other way. That’s not been a problem for traders, though. Most traders simply don’t care about the crackdown and are unaffected by it.

Giving Back the Profits in the Short Run

Young traders from Shanghai have been completely unaffected by the crackdown. Some have pointed out to losing millions in the past years, but aren’t concerned about it. They believe it’s a natural part of the crypto trading process, and are looking for gains in the 10-20 year run.

In 2017, China outlawed crypto exchanges. At the time, the country accounted for 80% of the full Bitcoin trading market. Due to the exchange ban, those kind of numbers are impossible today. The Asian country has also been doing a lot to prevent illegal BTC trades, busting gambling rings left and right.

However, investors are still hoping to raise their presence in the crypto world via OTC platforms and offshore venues.

The Chinese government has been trying its best to warn financial firms and other companies to stay away from crypto. This month, for example, the government has issued a reminder to banks to identify and block suspicious transactions. It has also reiterated the intention to punish cryptocurrency trades which violate the Central Bank’s rules.

The Beijing Police Department has distributed printed warnings about the dangers of crypto. Virtual currencies are popular for scams, yet the government’s goal to ban and prevent crypto trading hasn’t been received with a widespread appeal.

Purging the P2P Industry, One Step at A Time

To be perfectly honest, the crypto craze in China has left a serious mark. The country is trying to purge the P2P industry due to rapid frauds and defaults. In some cases, the craze has led to street protests and suicides. It’s becoming all too serious right now, especially for a growing market with over 50 million users and $150 billion in loans.

In June 2020, a couple from Dalian tried to commit suicide and killed their 3-year old daughter after losing approximately $3.1 million on a leveraged bet on Bitcoin. The price swings are simply too big to ignore, and the government is trying its best to prevent such cases from taking place again.

Of course, for all these cases, there will be traders that welcome the nature of the game. Many have saw massive profits lost, but are still hoping for a big payday. While the government is trying to shake things up and stop the trading, the market looks set to soar.

June 2, 2021: • No Comments

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