Although the Chinese government banned cryptocurrency trading in 2021, the Chinese have not completely abandoned crypto. By circumventing capital controls and using foreign platforms, they continue to manipulate this technology despite its informal nature in China. Recently, the frenzy around local stocks has impacted USDT, showing a shift of interest towards the Chinese stock market.
Fluctuating demand for USDT
The impact of crypto, particularly USDT, remains undeniable, despite a drop observed. Since the end of September, this stablecoin – news Tether, often exchanged for dollars, saw its price fall below its parity. For what ? There spectacular rise in Chinese stocks caused a panic, pushing some investors to sell their USDT for return to national actions.
“ We observe a correlation between the demand for A shares and the sale of Tether “, explains Annabelle Huang, partner at Amber Group.
At the same time, therates charged on Chinese peer-to-peer marketplaces clearly show this pressure: traders offer prices between 6.78 and 6.98 yuan for one USDT, while the offshore yuan trades at 7.07 against the dollar.
- 6.78 – 6.98 yuan for USDT on some platforms;
- Tether still has the majority in transactions despite everything;
- Increased pressure towards the yuan but USDT still used.
Crypto, resilient despite everything
Even with the ban, the black market for cryptocurrencies in China persists. The craze for stable crypto, especially for the USDT stablecoin, proves thatChinese investors are not about to abandon their digital strategies.
In fact, Chinese brokers are attracting considerable capital flows, showing continued strong demand for digital assets. These are mainly large institutional investors, like MNNC Group, who are redirecting part of their portfolios towards Chinese stocks, but without completely turning their back on crypto.
In this context, it is difficult to precisely measure the extent of movements on exchangesbut the figures speak for themselves: a Shanghai index which rose by 21% in September, and by 8% as soon as trade resumed in October.
However, despite Xi Jinping's crackdown, China's crypto black market is thriving, with revenues estimated at $23.7 billion in 2024.
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