it had rebounded by 0.82 percent. The huobi.com website could not be accessed as of Sunday afternoon.
Xing Hai, a veteran virtual currency investor, said that he had anticipated a government crackdown after he sensed that some token trading bourses started to “weaken” trading data, which in return would “stimulate people’s consumption desire” around the end of August.
“I was psychologically prepared, so when things actually happened, and I saw my assets drop in value, I could still keep my head up,” he noted.
According to Xing, the reason he was able to stay calm was because he had experienced the ups and downs of Bitcoin trading before. “I can understand that it’s normal for a virtual currency’s price to go on a rollercoaster,” he told the Global Times Friday night.
Xing first bought about 40 Bitcoins in April 2013, when one Bitcoin only cost 900 yuan ($137).
What he didn’t anticipate, however, was that each of his Bitcoins’ values would surge to about 7,500 yuan at the end of October, but then suddenly plunge to about 4,000 yuan. This came shortly after government departments rolled out a notice to warn of the risks of Bitcoin trading at the beginning of December 2013.
“I remember one day I was driving on the highway and I suddenly found out that the Bitcoin’s value had plunged by about 50 percent in just five minutes. I was so scared I almost dumped all my coins at once,” he said, noting that later, he bought back some coins, changing his investment mindset to a long-term model. This meant he wouldn’t be swayed by short-term fluctuations in the currency.
But holding on isn’t easy, particularly this time around, when many people are hastily dumping their virtual currency assets. “Some of my friends persuaded me to sell my virtual coins. I sold some, but I still preserve about half of them for future trading, maybe for overseas platforms,” he noted.
Xing now owns about 50 Bitcoins, along with some Neo coins.
But Xing acknowledged that investors like him are very rare in China; those who really believe in the longterm value of certain virtual coins. “Most people just want to earn quick money via trading of Bitcoins or other tokens, but they are the ones who will suffer the most losses from fluctuations in token prices,” he said.
Sun Hongping, who works at a hotel in Hangzhou, capital of East China’s Zhejiang Province, is one investor who experienced great losses recently.
He told the Global Times that his virtual currency assets had shrunk to about 3,000 yuan compared with his initial input of around 40,000 yuan.
According to Sun, many investors he knows “suffered a lot” during the clearing of tokens in recent days.
“The person I know who suffered the most experienced a loss of about 600,000 yuan,” he noted. “I would never put my hands on those currencies again.”
Seeking other options
Although virtual currency trading centers are now blocked by the government, investors are nevertheless looking for alternative trading methods nowadays, such as over-the-counter, private trading.
A reporter of the Global Times recently joined several crypto-token WeChat groups and saw that investors are currently hotly exchanging information about private token trading.
For instance, on Saturday afternoon, an investor offered to purchase several kinds of crypto-tokens and promised to give some rewards to the seller if the trade could be done face to face.
A blockchain project founder surnamed Wang, who wishes not to share his first name, told the Global Times that over-the-counter trading of tokens always existed, but that now, as major trading platforms are shut down, it is becoming more common.
According to Wang, over-the-counter trading can be done face to face, or it can be operated remotely through the Internet. “You could even buy Bitcoins on taobao.com before token exchanges were established in the country,” he noted.
Apart from over-the-counter trading, investors are also turning their eyes to overseas platforms. Xing, for example, told the Global Times that as far as he knows, many investors have already transferred their token assets to overseas platforms. He himself is also trading tokens on overseas platform bittrex.com.
Li Chao, an industry analyst with Beijing-based market consultancy iResearch, said that the trend of going abroad for virtual currency investment would lead to a certain level of capital outflow, but as long as the government guards the fence of foreign currency exchange limits, it wouldn’t have too much of an impact on China’s monetary health.
Against the backdrop, many domestic crypto-tokens that have been removed from domestic exchange platforms due to ICO regulations will be diverted to trading on overseas platforms soon. Such tokens include the Moving Cloud Coin and Dark Net Coin.
A source close to domestic virtual currency platform okcoin.cn also told the Global Times on Thursday that the platform is currently exploring overseas markets and might move its business focus beyond national borders in the future.
But Wang noted that less than 10 percent of domestic tokens have potential in overseas markets.
“They must have good technological capabilities. Domestic investors might ignore tech, but overseas investors are like tech geeks who pay great attention to the technologies behind projects,” he noted.
“Every blockchain project needs to go global at a certain stage, but now it seems that we have to make globalization preparations ahead of time,” he said.