According to CryptoQuant, China is set to return to the digital currency environment. The country is showing significant signs of a crypto market comeback, like BTC derivatives and spot markets.
Crypto to make a comeback in China
According to CryptoQuant.com, an onchain analytics and data insights firm, China has displayed massive indicators to kick back into the crypto world. These signs include growing volumes in both derivatives and spot markets, and the first Hong Kong-based bitcoin future ETF raised more than $74 million in its trading debut.
In December 2022, China’s Southern Asset Management subsidiary, CSOP Asset Management, listed the first ethereum and bitcoin futures ETFs in the Hong Kong stock markets. The organization garnered more than $74 million in startup funding ($ 54 million and $20 million, correspondingly).
Tim McCourt, global head of equity FX products at CME, stated that approving the ETF is essential in virtual currency adoption in Asia. He added that despite the drawdowns, BTC and ether had seen a 20% exponential rise in daily volumes in 2022 than 2021.
“The listing of these ETFs underscores the robust growth and increasing client demand for exposure to bitcoin and ether via CME Group’s transparent, highly regulated, and deeply liquid benchmark futures contracts,”
Tim McCourt, Global Head of Equity FX products at CME
In October 2022, China was listed as one of East Asia’s biggest crypto markets per transaction volume and was named 4th globally. The state is considered to hold 70% of global crypto-essential applications.
The state penned more than $220 billion in transactions between June 2021 and July 2022, beating Japan and South Korea, which had higher investment stakes in the ecosystem.
Blockchain’s history in the state
China’s individuals had fully embraced blockchain technology and were at the core of further enhancements. The younger generation believed in escaping the poor condition through digital assets.
Nonetheless, the government felt that the ecosystem would be of more harm and commenced procedures to ban it in 2013.
However, the introduction of startups and crypto-affiliated events like One Foundation’s fundraiser, Bitmain incorporation, and the inauguration of Huobi, prompted the Chinese government to take a closer look at the crypto industry and CBDCs.
In May 2021, China’s sovereign authority banned crypto assets, and financial institutions were restricted from using virtual currencies.
The government subsequently introduced its digital currency (Digital Yuan), which according to the state head, needed to be more anonymous and decentralized as the purpose of the blockchain ecosystem by Satoshi Nakamoto. Additionally, all crypto-mining activities were banned in June of the same year.