It has been 2 years that the People’s Republic of China had shut down the local cryptocurrency exchanges. This was done on the 4th of September, 2017 on grounds that the unregulated assets like Bitcoins allow the citizens to bypass the strict controls of the government.
It has been a not-so-happy anniversary
In spite of the formal ban, Chinese investors have tried to explore the methods to trade Bitcoins and other similar cryptocurrencies with the help of offshore platforms that are registered in Hong Kong and Singapore. As a matter of fact, a lot of these platforms had been operating from the mainland before they were forced out. This means that the crackdown of the cryptocurrencies in China had only allowed them to work from some other place that does not fall under Chinese jurisdiction.
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Who has survived this?
Many small industries that were small startups in China have turned into global giants of the cryptocurrency industry. Binance is now the leading crypto trading platform in the world. The reported annual turnover is about $445 million. The firm based in Malta was acting as a Chinese company before the ban became legalised. The regional clientele of Binance only needed to join a VPN to bypass the ruling of the central bank to keep on the trade in cryptocurrencies.
The story is somewhat similar for all the cryptocurrency exchanges that have survived the ban in China. OKEx was once a Chinese platform which now operates from Malta. The platform employes as much as 800 people from all around the globe. Even Huobi has gone global and it shows how the operations have swelled after it took its departure from China. The platform based out of Singapore now has offices in Japan, Hong Kong, the United States and South Korea.
The founding partner of the crypto-asset holding company, Primitive Ventures, mentioned last year that the young Chinese entrepreneurs had shown almost a ‘cockroach level survivability’. When they faced resistance at home, instead of shutting down, they decided to try their luck and put in efforts in the countries that were welcoming of the new ideas. The largest exchanges – Yunbi and BTCChina – vanished overnight. But the resilient ones – OKEx, Huobi Global, Gate.io -thrived, along with a lot of new players – Bibox Exchange and Binance.
The Bitcoin sentiment is very much in the spirit
An entire industry which had been banned thrived. Even after losing about 85% of the market valuation, Bitcoin emerged to become the best-performing asset of 2019. The increase in cryptocurrency prices took place against a string of macroeconomic factors, like aggressive monetary easing by central banks, the trade war between the US and China and the decision of Facebook to launch its cryptocurrency.
But the demand from Chinese investors played a huge role in the rising of Bitcoin prices.