Why China’s Retail Investors Are Missing the Bitcoin Boat

In letter

  • China’s private investors are not participating in this bull run as much as in 2017.
  • Right whales, Black Thursday crackdown on OTC shops and PTSD are some of the reasons why Bitcoin buying hasn’t gotten off the ground.

It feels like a carnival on Twitter since Bitcoin topped the $ 12,000 limit and steadily hit $ 18,000. However, that fun atmosphere is absent from the crypto circles of WeChat and Weibo, the Chinese equivalents of Twitter.

Why isn’t the Chinese crypto community joining their western comrades to celebrate the rally?

The answer could be that Chinese investors have completely missed the boat and only watch the price rise with empty pockets.

A bearish feeling

Dovey Wan, Founding Partner of Primitive Venture, tweeted yesterday that private Chinese investors “cut BTC all the way up” and added that “overall sentiment is bearish after BTC hit 12,000 …”

In a conversation that followed, Wan said Decrypt that “all the groups in which retailers are normally active are not pumped above 18,000 at all compared to 2017/2018. Back then, the wealth creation effect was quite strong. “

Wan said she also personally knew some Chinese whales that were short-circuited at 12 km and were “hard rect”.

Why are Chinese crypto investors less optimistic than their western counterparts?

Wan hypothesized that Chinese traders are more practical than Western bitcoin maximalists, which means that not only are they trading non-bitcoin tokens, but they are also not firmly convinced that bitcoin will hit $ 20,000 in such a short time becomes.

“People are incredulous and thought it was going to take a lot longer,” said Wan.

Over the counter FUD

Another reason pointed out by Mindao Yang, Founder of dForce, could be a lingering and devastating PDST effect from Black Thursday when Bitcoin briefly tanked to $ 3,000. This has thrown many private and institutional investors out of the picture and has traumatized them until now. “This is contributing to China’s diminishing impact on the price of bitcoin,” Yang said Decrypt.

The final reason could be tighter regulations against OTC trading in China. Since September, many OTC trading counters and individuals have been investigated by the government, and many have discovered that their accounts have been blacklisted or frozen by Chinese banks. “As a result, it will become less convenient for Chinese retailers to switch from fiat to crypto,” said Yang.

Yang added that blocking the OTC trading desk isn’t why bitcoin miners keep their crypto like proposed by Lasse Clausen. Instead, most miners have ways to purchase fiat to pay for electricity without selling bitcoin.

But not only Chinese private investors missed the Bull Run Train. The current rally has little to do with private investors. As Decrypt Previously, Bull Runs saw a huge inflow of Bitcoin to major exchanges. The current bull run, however, not only saw a very low exchange rate inflow, but also a massive outflow of Bitcoin from the exchanges.

The true benefactor, as many (including Chinese video surveillance) have indicated that they may be western institutions, including organizations like Greyscale, which have large numbers of crypto assets and are showing no signs of slowing down.