A lot of experts had seen this coming, especially when the first sanction was placed on Bitcoin, and the cryptocurrency began to get heavily regulated in the country. China and cryptocurrency have never gone together well, and if the latest development is to be taken into account, the future in china is one where no cryptocurrency exchanges exist, not even those operated by the government itself.
The End of the Cryptocurrency Era in China
The last exchange that was still operational within Chinese cyberspace closed its operations on Wednesday. The ban was originally announced in the middle of September, and since then, it was gradually becoming more and more illegal for mainlanders inside China to trade cryptocurrency online.
The only exception to this was if you worked offshore, and had the entire exchange off Chinese cyberspace. And this, incidentally, is where the formerly Chinese cryptocurrency market seems to be headed.
The Closing of Huobi
The closing down of the trading platform by the name of Huobi was the last significant shift in the Chinese cryptocurrency market, and it marked the very end of operations for platform and individual account holders inside China. The platforms however, have not stopped the trading of Bitcoin, and have successfully moved their operations to cryptocurrency friendly countries such as Hong Kong, South Korea and Singapore.
BTCC, which was based in Shanghai, stopped all trading activities is reported to be charging users to withdraw whatever balance they had, latest by Friday.
Popularity of Bitcoin and Cryptocurrency in General
Although the number of cryptocurrencies is in the hundreds, the true player of the game is Bitcoin. This one cryptocurrency has cemented its legacy among the enthusiasts and traders alike, and despite all the hurdles that it has faced in countries such as China, it still continues to go strong. The last couple of years have spelled almost non-stop success for Bitcoin, and a number of well-off family offices, as well as highly professional investment companies and hedge funds have been heavily investing in all manner of digital securities.
These securities are created out of nothing, and are subsequently used to provide capital for a number of startups, in both the native country and abroad. For the investors who are based in China, Bitcoin used to be the most popular cryptocurrency.
The gambling problem with the majority of China’s well off population is what led to the policy makers take action against initial coin offerings first, before eventually shutting down Bitcoin in the country. The later was the main source of capital for a number of new startups in the country, and although according to some, this is fake capital and doesn’t really amount to much in the practical sense, it still was a source of value to the startup, and definitely helped the cause of a business.
All is not lost in the cryptocurrency market however, as operations that used to be centered in the country have now moved abroad, and exchanges are still functional, with the traders who were functioning in the country, now doing so in the offshore exchanges set up by the same companies that were once the biggest trading companies, with the biggest trading platforms in China.