China’s cryptocurrency trade has remarkably increased to $86.4 billion, defying the country’s strict prohibition on Bitcoin. According to a recent industry analysis, the Evergrande housing crisis and the fall of the Chinese stock markets are the two main economic shocks that caused this unanticipated rise. These events sparked a notable change in China’s investing habits, which has raised interest in Bitcoin and other digital currencies.

Why Did China Ban Crypto? 

The Chinese government took a hard line on cryptocurrencies in 2021, banning Bitcoin activity including mining, trading, and investment in Bitcoin within its borders. Significant concerns about market manipulation and the absence of strict regulations in the cryptocurrency space prompted the taking of this strong move. Even with this severe approach, Chinese nationals are still investigating and investing in virtual currencies.

Impact of Economic Downturns

Chinese investors’ financial tactics significantly adjusted in 2023, primarily due to the country’s stock market collapse and the disastrous Evergrande real estate crisis. The latter episode alone caused a loss of nearly $81 billion for investors and homeowners. Furthermore, there was a notable 11.8% decrease in the CSI 300, a crucial stock market indicator in China. 

Chinese people have been wise in their approach to cryptocurrency investing despite the tight ban. According to Reuters reports, people use bank cards from smaller commercial banks to buy cryptocurrency from grey-market vendors. This pattern reflects the public’s growing perception that cryptocurrencies provide a safer shelter than the erratic stock and real estate markets. The strategies used are varied and include using foreign bank accounts, online cryptocurrency exchanges, and over-the-counter (OTC) agreements. Moreover, well-known cryptocurrency exchanges like Binance and OKX support these investments by advising them to convert yuan from well-known payment services like WeChat Pay and Alipay into stablecoins.

Exchanges Located in Hong Kong to the Rescue

Hong Kong, a unique administrative territory next to the Chinese mainland, is crucial in easing cryptocurrency transactions for Chinese nationals. The region has become a refuge for bitcoin exchanges and investment organisations due to its more liberal laws regarding digital assets and its advantageous location. Prominent organisations like as HashKey Group and OSL have obtained retail cryptocurrency licences from the Securities and Futures Commission (SFC) of Hong Kong, allowing them to function inside a regulatory structure. This development highlights Hong Kong’s critical position in the ongoing story of China’s cryptocurrency trading environment. It has been a godsend for Chinese investors seeking safe and legal routes to trade in Bitcoin.

China’s Crypto Trading Volume Surges to $86.4 Billion Despite Ban

Ironically, the regulatory barriers in their native country haven’t stopped Chinese investment. Many have used their $50,000 yearly foreign exchange purchase quota to transfer money into cryptocurrency accounts situated in Hong Kong. Trading volumes have increased significantly as a result of this calculated move. According to a Chainalysis analysis, China logged an incredible $86.4 billion in Bitcoin transactions between July 2022 and June 2023. This amount exceeds Hong Kong’s $64 billion cryptocurrency trading volume and represents a significant turning point in China’s covert but rapidly expanding cryptocurrency economy.

Speculations and Global Influence

Despite the official prohibition, there has been a spike in cryptocurrency trading in China, which has raised concern about a potential change in the Chinese government’s position on digital currencies. China and other countries may reevaluate their methods of regulating cryptocurrencies in light of the US Securities and Exchange Commission’s (SEC) recent approval of the Bitcoin Spot ETF. Observers of the industry and analysts are keeping a careful eye on these events, wondering if China’s changing regulations on the digital finance sector may be tested in Hong Kong, given its status as a hub for cryptocurrency trading. This situation points to a broader trend of regulatory flexibility and the possible acceptance of cryptocurrencies in international marketplaces.


Kelly has carved a niche in the dynamic world of Web3 over the past three years, combining her talents in marketing and writing to become a standout Web3 copywriter. Her journey in this innovative field is distinguished by her profound engagement with the decentralized technology landscape. Kelly’s creative prowess, coupled with her deep understanding of Web3, enables her to create compelling narratives that resonate deeply within the blockchain community. Beyond writing, Kelly’s marketing acumen has been instrumental in elevating various Web3 marketing projects, making them prominent in the realm of digital innovation.