Cryptocurrency

China’s cryptocurrency investors made gains of more than US$1 billion in 2023 despite sweeping government ban


Hong Kong cryptocurrency investors realised gains of US$250 million last year, according to Chainalysis. In 2021, they made US$1.3 billion.

The prices of cryptocurrencies against the US dollar are displayed on a screen in Hong Kong in this file photo from February 29, 2024. Photo: Bloomberg

Overall, cryptocurrency investors around the world recorded total gains of US$37.6 billion in 2023, down from the US$159.7 billion during the 2021 bull market, according to Chainalysis.

Still, last year’s gains represent a significant recovery from 2022, which saw losses reach US$127.1 billion.

In both 2021 and 2023, US cryptocurrency investors realised the biggest gains in the industry, according to Chainalysis, when they made US$47 billion and US$9 billion, respectively.

The gains pulled off last year by mainland investors showed how the nation’s community of cryptocurrency enthusiasts has continued to thrive, despite Beijing’s rigid stance against all activities related to the virtual asset.

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Cryptocurrency trading via a number of major exchanges has remained active in mainland China, as local enthusiasts employ a range of workarounds and skirt loosely implemented restrictions.
Those exchanges, including Binance, have allowed trades by mainland users, even though warnings are displayed on their sites against such activity.

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That price rally, however, has also prompted fresh warnings from Chinese state media. A rebound in bitcoin prices cannot “hide” the underlying risks of the digital asset, state-owned newspaper Economic Daily said in article published earlier this month.
By contrast, Beijing has pledged support for Hong Kong’s goal to become a major hub for virtual assets. The city has taken steps to enable retail investors to trade virtual assets on licensed platforms.
So far, the positive trends of 2023 have carried over into 2024, with bitcoin already achieving all-time highs in the wake of spot bitcoin exchange- traded funds activity in the US and increased institutional adoption, according to Chainalysis.

“If these trends continue, we may see gains more in line with those we saw in 2021,” Chainalysis said. “As of March 13, bitcoin is up 65.4 per cent and ether is up 70.2 per cent.”



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