Dylan Run, a Shanghai-based finance executive, diversified into cryptocurrencies in early 2023 due to the deteriorating Chinese economy and stock markets. Bypassing the crypto ban, investors utilize creative methods to trade bitcoin and other assets, considering them safer than domestic options.
China’s economic slump pushes investors toward offshore allocation, with cryptocurrencies emerging as a popular choice. Despite regulatory restrictions, mainland investors leverage overseas accounts, Hong Kong’s endorsement, and $50,000 annual forex quotas for crypto investments.
As retail investors flock to cryptocurrencies, Chinese brokers and financial institutions explore crypto-related ventures in Hong Kong. The subsidiaries of major Chinese entities like Bank of China and ChinaAMC are venturing into digital asset businesses in pursuit of growth amid challenging domestic markets.
The Chinese crypto market, although officially banned, witnesses substantial activity, recording $86.4 billion in transaction volume. Popular exchanges like OKX and Binance continue to cater to Chinese investors through over-the-counter channels. Chainalysis notes the surge in crypto-related activities, indicating a thriving underground market in China.
Despite regulatory challenges, brick-and-mortar crypto exchange stores appear in Hong Kong, offering a lightly regulated environment for crypto enthusiasts. Observers speculate that the Chinese government may be gradually warming to cryptocurrencies, with Hong Kong serving as a potential testing ground.
