It is not easy to be a fan of Chinese cryptocurrencies. The buying and selling of trendy digital assets has been strictly limited in the country since the country banned trading platforms in 2013. Mining, the energy-hungry process that creates most crypto “tokens,” was kicked out of China. in a 2021 crackdown. And now prices are plummeting in a global cryptocurrency crash that has vaporized more than $1 trillion in paper wealth.
Chinese cryptocurrency fans who survived the bans also won’t let a little thing like a trillion-dollar financial catastrophe faze them, several told Sixth Tone. But in the short term, it can be costly faith.
Despite the crackdown, China is believed to have a sizeable community of crypto investors. China was the source of around 10% of the traffic for major crypto derivatives trading platforms OKX and Deribit, according to web analytics firm SimilarWeb, though it did not rank in the top three for major exchanges Binance and Coinbase in the same study.
The Chinese public is certainly interested in cryptocurrencies. The accident has made headlines and has headed the threads of social networks. State media have used it to vindicate the government’s policies against cryptocurrencies, saying that it proves that cryptocurrencies are “nothing more than a string of digital code” and that the regulations have protected Chinese investors from losses. Meanwhile, individual investors have complained of losses in public and private forums.
The collapse of the Terra and Luna currencies, which promised risk-free, high-interest savings accounts, sparked the crash. “Many people bought with high leverage after seeing an 80% drop. They ended up deep in the swamp a few days later,” said Huang Zijian, a part-time cryptocurrency investor based in Shenzhen. He escaped unscathed with some timely sales, but a friend lost about 400,000 yuan ($59,840) in two days. Huang gave a pseudonym, citing the delicacy of the matter.
“It caught us very off guard. I have never seen big institutional players go down so hard in the past,” said Huang.
On investor forums, earnings boasts have given way to derisive jokes about being forced to “lie down,” a Chinese catchphrase for yielding to fate, said Cai Zhuoheng, a crypto enthusiast who requested to use a pseudonym for the sensitivity of The 23-year-old, who first tried crypto in June 2021, took his losses early and avoided the big drop. He lost 30,000 yuan several months ago and sold all of his digital assets.
“I could not have survived this accident even if I had made a profit earlier,” Cai said. “The crisis actually made me feel better; I realized that no one could stay afloat in such a downward spiral.”
But despite the official warnings and the slide, many investors seem unfazed. Despite the short-term pessimism, Cai said that many have continued to hold the currencies and wait for a rebound.
Mining investors, many of whom remain in the field after moving operations abroad, are particularly optimistic, Cai said.
“Those who lose their minds tend to be short-term traders, but if you look at miners or people who make mining-related investments, they are much calmer and won’t get out of business until it’s completely unprofitable.” , said. he said she.
Huang also plans to stay in the market, he said. He has only used additional income from side jobs, so he can avoid taking some risks.
“Like the Internet, Bitcoin has also grown with derision, doubt and rejection in the last decades, but in general its price is increasing and it is gaining more and more recognition around the world,” said Huang.
Li Xueying, an online video production company, said she is considering entering the market while it is down. She became interested after meeting a group of veteran crypto investors in a new job.
“When you are surrounded by veterans who can provide you with reliable market information, it increases your confidence to go forward despite the risk.” The 24-year-old requested to use a pseudonym due to the sensitivity of the matter.
Cai also said he would buy again once he finished reflecting on his previous investments, but felt the market has lost its initial idealism as new money pours in.
“For us newcomers, we saw it simply as a game to make money. Just like any other financial activity, you accept the risks and rewards once you place your bet.”
Publisher: David Cohen.
(Banner image: A digital screen displays US dollar cryptocurrency prices in Hong Kong, March 25, 2022. Paul Yeung/Bloomberg via Getty Image/VCG)