How to spend your Shanghai bitcoin cash
Beijing, China – Chinese consumers are increasingly spending their yuan in bitcoin cash.
As Chinese traders prepare to start withdrawing their yuan from the world’s largest bitcoin exchange platform on Monday, bitcoin has gained traction across the world as a safe haven.
Bitcoin has soared more than 1,400% over the past three years, with investors pouring billions of dollars into the virtual currency to speculate on its future value.
China’s economy has been in a severe slowdown, and the central bank has pushed the country towards a cashless society, but the country has a population of more than 200 million, which means its bitcoin users are growing in numbers.
With China’s economy slowing to a halt and the country struggling to meet its debt obligations, bitcoin’s surge is set to help push its value higher.
However, it remains a volatile investment, and one that is only worth its current value if it can be purchased at a reasonable price.
There are still significant risks associated with bitcoin.
A recent cyber attack in China killed nearly $10bn worth of bitcoin in the first quarter of 2017, and while the market has recovered somewhat since then, there are still a number of bitcoin exchanges that are not cooperating with regulators.
In Shanghai, the biggest bitcoin exchange by volume, the Shanghai BTC exchange, which was hacked in June and which also operates the China BitPay payment processor, has been closed for over a month.
The Shanghai BTC market is currently worth around $4bn, according to market researcher Bitcoin Tracker.
However some of the most popular bitcoin trading platforms, such as Bitfinex and Huobi, continue to operate, and there are plenty of others out there offering similar services.
“If the bitcoin price stabilises, it will be very difficult for any exchange to remain open for more than a week or two,” says Mr Chen, a Shanghai-based bitcoin trader.
The market will be much easier to sell once the Shanghai BitfineX and Huobi exchange sites reopen on Tuesday.
For now, the Chinese government is warning the Chinese public to be cautious about buying or selling bitcoin.
China has been tightening its control on the cryptocurrency in recent months, tightening controls on exchanges and bitcoin trading in a bid to stifle the bitcoin market.
“It is a very delicate situation for the Chinese people and for bitcoin,” says James Chen, co-founder of Crypto Investment Advisors.
“Bitcoin is not a commodity, it is a service, it’s a platform, it could become very expensive to trade, especially if the Chinese authorities tighten their control over bitcoin trading.”
In the meantime, China is not likely to stop investing in bitcoin anytime soon, as it is already one of the world top 10 largest bitcoin trading markets.
“There is no way China can stop investing, it doesn’t matter what happens with bitcoin,” Mr Chen said.
“China is in the same boat as any other country.
The government controls the financial system and the economy, but it is the people that control the economy.”