- Chinese crypto will face a rebound because of the liquidity in the country, and this is what we call the China narratives.
- This rebound will either sustain or revive the bull market is still unknown.
- In regards to narratives such as COVID, there are a number of theories that have emerged.
China took the decision of abandoning the ‘Zero Covid’ to shoot $600 billion yuan into the economy, eventually drawing up the risk in assets that incorporate Chinese crypto tokens and bitcoin. Cryptocurrency is gaining more popularity since the recent update from June 1, 2023, which allows retail investors to trade in cryptocurrency. This led to a rise in demand for Chinese narratives.
How Chinese Narratives Work?
In December, the Chinese government unexpectedly ended COVID restrictions. When the restrictions were lifted, people started heading out and spending money. That led to the flow of money in the economy again. Now the money printer has to give more liquid to the economy in order to function properly.
China is shooting more liquidity assets not only because of the post- COVID conditions but also because of the crisis in China’s real estate market. The GCR showed a thesis that gave the green light to development. This bull run would come from an Asian country where Bitcoin continued to rally from its lows.
History Of Chinese Narratives
The history of Chinese cryptocurrency can be traced back to 2011 when China’s first Bitcoin exchange was introduced. The same was accepted as payment in early 2013. Followed by this, Huobi and OkCoin which are somewhat one of the biggest cryptocurrencies embarked in China.
Role Of Hong Kong In Chinese Crypto
Traditionally, Hong Kong was considered the hub of crypto in China. However, the eradication of crypto led to many exchanges out of Hong Kong. But, it seems like China is trying to bring crypto back to its hub. Not long ago, Hong Kong’s Securities and Futures Commission (SFC) introduced the rules related to the license of crypto exchanges. Additionally, they are planning to regulate the stablecoins in June this year.
Some of the arguments came out that China is planning to make Hong Kong its financial hub which will compete with New York and London. And, for this to achieve, one can’t take their eyes off the market of cryptocurrency.
Are Chinese Narratives Real Or Not?
This is where the concept gets confusing as the answers depend on who you are looking at. If someone reads Chinese accounts, they will portray Chinese narratives as real as ever. On the other hand, Bitcoiners suggest that narratives don’t matter at all. It’s hard to draw any conclusions since the relationship between crypto and Chinese stocks is not strong enough.
Whether Chinese narratives will grow in the future or not, we don’t know. However, it’s not a bad idea to fix our glances on Crypto Twitter since it can take a huge turn at any time.