The decline in the profitability of the Chinese stock market prompted the country's citizens to turn to protecting their savings by purchasing alternative risk hedging instruments, primarily crypto assets. Reuters writes about this.
► Read the Ministry of Finance page on Facebook: main financial news
Reuters sources in the management of one of the Hong Kong cryptocurrency exchanges report that the general economic downturn in China “has made investing on the mainland risky, uncertain and disappointing, so people are looking to place traditional assets in their alternative form on the crypto market.”
“If you are a Chinese brokerage facing a weak stock market, weak demand for IPOs and shrinking other businesses, you need a growth story to tell your investors, shareholders and board of directors. Almost every day we see investors from the mainland entering the digital currency market,” says an anonymous top manager.
After the authorities of the special Chinese region of Hong Kong approved digital assets, Chinese residents began to actively use annual quotas for the purchase of foreign currency in the amount of $50,000, and then convert them into digital assets and transfer them to cryptocurrency accounts. The increased interest of Chinese investors in crypto-assets is confirmed by data from the Chainalysis analytical platform.
It is reported that cryptocurrency-related activities in China have increased, and the country’s global ranking in terms of peer-to-peer trading volume has risen to 13th place in 2023. from 144th in 2022.
The volume of transactions in the Chinese cryptocurrency market from July 2022 to June 2023 is estimated at $86.4 billion, and the share of large retail transactions ranging from $10,000 to $1 million is almost doubled exceeds the global average.
Previously, the People's Bank of China published the “Report on the Financial Stability of the People's Republic of China for 2023,” which listed the risks and threats that cryptocurrencies pose to citizens of the country.