BIZINSIGHT

Global Times US Edition - - BIZCOMMENT -

it had re­bounded by 0.82 per­cent. The huobi.com web­site could not be ac­cessed as of Sun­day af­ter­noon.

‘Roller­coaster ride’

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.

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