China’s central bank boasted earlier this year that their probably illegitimate ban of crypto exchanges was very successful, but a new study is showing that the user numbers of cryptonians is growing according to local media.
“The statistical results of Aurora Big Data show that the industry penetration rate of virtual currency applications has entered a rising channel since last November, and the growth rate of industry penetration has slowed down significantly since June this year.
As of September, the number of industry users of virtual currency applications reached 7.51 million, an increase of 230.84% over the same period last year,” they say according to a rough translation.
It appears PBOC’s diktat was initially successful as user numbers fell between September and December 2017 even as the west and much of the world was gripped by what the media described as crypto mania.
Since December last year, however, there has been steady growth with crypto user numbers tripling as estimated by the downloads of crypto related apps.
They say mobile light wallet imToken, as well as Huobi Pro and OKEx crypto exchange apps, are the most popular crypto applications in the country followed by crypto media apps.
As this is looking at app downloads, the estimates do have to be taken with skepticism, but generally it appears cryptos are seeing a rebound in China. Interestingly they say:
“The user-level distribution results updated to September show that 12.7% of virtual currency application users are distributed in first-tier cities, and the proportion of users in new first- and second-tier cities is 19.8% and 19.5%, respectively.
Third-tier cities accounted for 20.7% of virtual currency applications, and 27.3% of users were distributed in cities with four lines and below.”
At face value that seems to suggest that China’s poor are more interested in crypto, but it might also be that China’s poor are more numerous.
About 52%, however, are in first and second tier city, with China dominating google searches for ethereum in particular – which google’s search trends estimate will rise to 50 out of 100 – and for Solidity especially.
A number of highly public events occurred in China this year that may have brought considerable attention to eth as some used its blockchain to bypass the strict censorship implemented by the Chinese Communist Party.
That may have brought attention to the relatively new world computer which hasn’t seen a China fever, unlike bitcoin or unlike in South Korea.
How are these 7.5 million Chinese people using crypto, however, considering it has effectively been banned as far as conveniently buying and selling it?
That we do not know, but electricity is very cheap there so they might be mining it. That may have created fairly widespread availability of peer to peer trading, but we suspect it is probably more of a work around of sorts.
China can ban its own banks from dealing with crypto, but obviously not foreign banks. An easy way to get around the ban, therefore, would be to transfer outside of the country up to circa $50,000 due to capital controls, so buying or even selling crypto on foreign exchanges.
We’ve long speculated that much of the volume in South Korea is actually Chinese because South Korea’s astonishing rise coincided with China’s fall where this space is concerned.
On the other hand, South Korean exchanges have been forced to take protectionist measures of allowing only South Korean nationals to sign up on their exchanges. That would invalidate our theory, unless one assumes that finding a South Korean proxy would be somewhat easy.
Meaning China has effectively shot itself on the foot by forcing capital outside of its country, capital that necessarily wants new investment opportunities, thus goes to great length to get them.
In the process they have impoverished to some extent part of their own nation to the benefit of crypto businesses in Japan, South Korea and elsewhere.
India is now seemingly thinking of going through the same process despite their people priding themselves of being a democracy, unlike China.
A peaceful battle of sorts is being fought in the world’s second most populous country as a court case challenging a diktat by India’s Central Bank has been halted by the government there which has promised an announcement of state policy on cryptos.
There’s some sort of power struggle, or so we suspect in any event, between the old bankers and the elected. Certainly in India and maybe also in China, but perhaps there was one even in US which the elected appear to have won with the assistance of the young bankers.
The people don’t care, of course. They route around. They go offshore. They mine it. They go peer to peer or they become proud criminals. For there’s a balance of powers on these matters. 51% isn’t just a technical term, but a description of what may well be quite an insight, regardless of the political system.
Original story and image from: https://www.trustnodes.com/2018/12/13/chinas-ban-may-have-failed-as-study-shows-theres-now-7-5-million-chinese-cryptonians