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The weakening of the yuan to the levels of the economic crisis of 2008 ensures a stable demand among the Chinese for the purchase of Bitcoin. Despite the People’s Bank of China’s (PBC) active policy of banning cryptocurrencies, BTC remains the only way to overcome severe restrictions on the withdrawal of capital, as well as save savings from the depreciation of the national currency.
As the current crisis has shown, traditional investment protection tools have stopped working in China.
We are talking about deposits, the interest rates on which are falling due to lower NCB rates against the backdrop of rising inflation, as well as the collapse of the real estate market. Almost the majority of large Chinese developers are on the verge of default. The stock market, where most Chinese have invested, recently tested the lows of 2011.
Bitcoin did not react to the first rise in the yuan exchange rate, but the second wave, which confirmed the stability of the trend for currency depreciation, caused a constant buyout of all attempts to “drain” BTC. Now Bitcoin has become the only risky asset with a stable exchange rate against the backdrop of a six-week sell-off in stock indices.
The People’s Bank of China reports victory over cryptocurrency. According to the NBK, the share of Chinese transactions has decreased from 90% to 10% by 2022. ChainAnalisys data registers a reverse trend.
If in 2021 the Central Bank managed to achieve a sharp decrease in crypto activity, then by 2022, China returned to the top 10 countries with the massive adoption of digital currencies.
Despite the severity of the measures, even mining has survived in China. A complete ban on the mining of crypto-currencies was able to destroy only 2/3 of enterprises and China ranks second after the United States in terms of the share of hashrate.
The anti-crisis flat trend of Bitcoin is gradually attracting the attention of an increasing number of investors, not only in China. Yesterday’s reports of IT-companies in the US market showed that the business could finish the third quarter worse than analysts’ expectations, which crosses out the possibility of recovery in stock markets.
This means that large investors are increasing their investment in bonds, further strengthening the dollar, causing the depreciation of national currencies. Small investors have no choice but to diversify their portfolio by increasing the share of cryptocurrencies.
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