Chinese crypto investors are going against the government’s largest crackdown on crypto since 2017 by placing secretive bets. A report unveiled this news on May 31, noting that this development shows just how hard the Chinese government has to work to control the speculative boom in cryptos. Reportedly, knee-jerk selling over the past few weeks has triggered the comeback of over-the-counter (OTC) platforms.
According to the report, which cited data from Chinese crypto price-tracking website Feixiaohao, the exchange rate between China’s yuan and Tether (USDT) plunged as much as 4.4% after the Chinese government tightened clampdowns on crypto trading earlier this month. As a result, the crypto sector lost approximately $1 trillion (£0.71 trillion), seeing as Chinese traders account for a significant part of the global crypto trading volume.
However, the exchange rate has since recovered more than half of its loss. Allegedly, this recovery is powered by traders who are striving to continue trading crypto without legal liabilities. Allegedly, transactions on OTC platforms and peer-to-peer networks are hard to trace, even for authorities. This is because firms such as Huobi and OKEx allow customers to place bids and offers. Once traders agree on a price, they use a separate payment platform to trade yuan for crypto. As such, authorities remain lost, seeing as they have no way of connecting one step of the transaction to the other.
Traders remain resilient despite the massive selloff
While the recent slump in the crypto market has discouraged traders from investing in the nascent space, Chinese traders are resilient and bullish in the long term. One such enthusiast is a 35-year-old Shanghai-based real estate consultant named Charles. Per Charles, the poor performance of the crypto market at the moment is all but a fleeting moment.
While he claims to have lost $11 million (£7.76 million) in three days, Charles says he considers this loss as giving back a fraction of the profits he made during the crypto boom that saw Bitcoin (BTC) peak at $64,863.10 (£45,759.94). He went on to disclose that he has been investing in crypto since 2017, and he believes the burgeoning industry might perform exceptionally in the next 10 to 20 years.
At the time of writing, 10:50 AM UTC, most coins in the crypto market try to recover from their losses, with BTC/USD changing hands at $36,963.74 (£26,083.46) after gaining 3.13% over the past 24 hours. However, BTC is still 43.14% down from its ATH despite these efforts.