share of yuan-denominated bitcoin transaction volume in the global total last September highest transaction volume of yuan-denominated bitcoin accounted for 22.36 percent of the global total, according to Coinhills, a provider of information on cryptocurrencies. But, following the PBOC ban, the figure plummeted to less than 1 percent in the final two months of 2017, it said.
The tightening of regulation led to a sharp decline in virtual currencies’ value, which may be conducive to the industry’s long-term development though, some investors said.
“The top priority in renewing regulatory measures is to ensure the security of the national financial system,” said Zhong Xinlong, a consultant at Chinese research company CCID Consulting. “It takes some time to research and develop an effective mechanism to ensure the safety of cryptocurrency trading, as well as to offer trading framework and relevant financial services.”
Agreed Jason Jia, who has been dabbling in cryptocurrencies for more than eight years now. “The effects of tighter regulation can be felt now. Quite a few Chinese traders have quit trading.”
But not everyone is nervous or chastened. “Without a doubt, earnings (from trading in cryptocurrencies) would grow substantially in the future,” said Liang Tiancheng, a latecomer among digital investors. In less than three months, he invested 20,000 yuan, and return on his investment averaged 5 percent.
Bitcoin’s rise, rather its roller-coaster ride, is expected to continue this year, according to a recent report released by Canaccord Genuity, a financial services firm.
On Mar 5, bitcoin’s price surged to $11,377 per unit, up about 58 percent from a month earlier, according to Coinbase data. But cargoloader Zeng Wen, who oscillated from one extreme of 2,800 yuan in monthly salary to the other extreme of 1.2 million yuan in notional wealth within two months, may not lose much sleep over it this time round.