Why is Bitcoin Popular in China?

From what I’ve been told, China lacks options for the general population to safely invest. This is why so many people buy property as an investment. This has a negative impact on China’s housing market, inflating prices to an intense degree. Young Chinese newlyweds would never be able to afford housing if not for the accumulated contributions from their entire family.

Many people believed that Bitcoin might the key to future riches. But as the price has slumped throughout 2018, many are feeling disillusioned with the potential rise of the cryptocurrency.

But Bitcoin farms in China are still popular among engineers because of the cheap power available in the country. Though it is very risky to buy and hold Bitcoin in the expectation that it will increase in value in the future, mining the currency in expectation of future sales is easier to quantify.

Another reason that Bitcoin continues to be popular in China is that it can be used as a tool to obfuscate and transport wealth around the world. Rich Chinese, who are worried about the state of the economy under the rise of Xi Jinping, use Bitcoin as a tool to send money abroad. Without government approval, there is a 50,000 RMB limit for people to send money overseas.

Bitcoin has provided a technical conduit for sidestepping these restrictions.

Nearly 74% of all the Bitcoin in the world has been mined in China, with the majority of the cheap electricity and mining power. China by far has the largest mining capacity.

A year ago, when Chinese people wanted to buy crypto, they had a choice of going through three different exchanges:

• OkCoin
• Huobi
• BTC China

Users used to be able to purchase digital assets on these platforms until late 2017. When the authorities realized these currencies could be used to easily transport wealth, they put a halt on all withdraws.

Being able to purchase Bitcoin as an asset to sell after the price increase was still a viable idea. But after the price slump and everyone ditching their coins and closure of platforms, BTC as an investment isn’t as appealing anymore.

Chinese can still buy bitcoin from overseas exchanges. The difficulty always emerges when attempting to exchange Bitcoin for FIAT. If they can’t use online exchanges, they can still do business in person. They can meet face-to-face and one can pay in cash, with WeChat Pay, or Alipay while the other makes the transfer. Peer-to-peer marketplaces or OTC exchanges make this even simpler.

LocalBitcoins is different than many other exchanges in important ways. For example, if you were to buy and sell your coins on a crypto exchange platform like Bittrex, you have no way of knowing who you’re buying or selling from. There is no trust and no community built around it. Local Bitcoins works as a trustworthy escrow to make sure the coins are real and available and holds the coins until the transfer can go through. This is why the system is so effective.

The other things that makes Local Bitcoins different than other exchanges is that the money is paid from one user to another. It is not sent into a trading platform first, then distributed when the coins are sold. The downside of a P2P platform like LocalBitcoins is that it can take a little time and sales are not always immediate. But most of the time, good sellers will be quick and responsive to your orders as long as you send payment quickly.

As far as I can tell, there are no businesses in China that openly accept Bitcoin as a means of payment. There are also no Bitcoin ATM kiosks like those that have been introduced in Japan.

There are some other shitty guides online on this topic that contain misleading information. They show reviews for platforms that are no longer available, like BTC China. If you go to BTC China today, you’ll see this notice:

Some of these guides online show platforms you can buy Bitcoin on while in China, but that’s not the same thing as a platform for exchanging BTC for RMB FIAT. As far as a I know, the only platform for exchanging RMB for BTC is P2P platform LocalBitcoins. Below, I'm going to review some other exchanges you can use if you want to sell your coin for dollars, or buy coin with a credit card.

Coinbase is not available in China.

You can sign up for their service if you live in a participating country. These days, in the U.S. you need to send in a photo of a state ID to open an account.

This is the service I use to send cash back to my bank after buying with Bitcoin. I feel this is a trustworthy service and they are one of the biggest BTC brokers in the world.

They accept Bank Transfer, Credit Card, Debit Card, SEPA tranfer and more.

While you can’t use bitcoin exchanges in China, you can use international platforms to trade cryptocurrencies and make profits on the fluctuating ups and downs. Some people view these platforms with trepidation, as there doesn’t seem to be an authority on the topic of trading crypto. Possibly, one of the best methods to examine and making trading decisions is the Wycoff method.