A report revealed that traders based in China opted to bypass local crypto laws to continue trading cryptocurrencies.
What Happened: According to a recent report from Bloomberg, Chinese crypto traders have continued to trade digital assets despite the government’s more recent warnings against virtual currency transactions.
A State Council committee led by Vice Premier Liu He recently re-iterated the nation’s crypto ban, leading to a market-wide selloff given the high authority of the committee.
Fears appear to have been short-lived as Bloomberg reported Chinese crypto traders took to OTC desks to continue trading cryptocurrencies.
“I don’t care,” said Charles, a 35-year-old real estate consultant in Shanghai to Bloomberg. In spite of losing $11 million in the three days that followed Bitcoin’s sharp fall, he intends to continue holding his cryptocurrencies.
“To me, it’s giving back the profits I made in the past few months,” he said. “I’m looking at the 10- to 20-year horizon.”
Another telling sign that Chinese traders have resumed trading cryptocurrencies is the recovery of the exchange rate between the Chinese yuan and the stablecoin Tether (USDT), which is used to facilitate most crypto transactions.
In the immediate aftermath following the May 19 selloff, the exchange rate fell as much as 4.4% but has since recovered more than half the losses, according to Chinese crypto data platform Feixiaohao.
Bloomberg notes that before crypto exchanges were banned in the country in 2017, China alone accounted for 80% of the world’s Bitcoin trading.
These crypto investors are believed to still be a “major presence” in the crypto space operating through OTC platforms and offshore venues.