In a testament to the ability of cryptocurrency companies to withstand government attempts to shut them down, Chinese cryptocurrency exchanges are not just surviving – they are thriving. Late last year the Chinese government ordered all cryptocurrency exchanges in the country to shut down, in addition to a ban on initial coin offerings. The government also put pressure on payment providers not to process transactions for cryptocurrencies, essentially putting an end to cryptocurrency purchases in China.
China had been home to two of the largest cryptocurrency exchanges in the world, Huobi and OKCoin. The Chinese market was hugely important to Bitcoin and other cryptocurrencies, yet just like that it was shuttered. But that didn’t stop Chinese cryptocurrency exchanges or enthusiasts. They just adapted.
Huobi, for instance, launched Huobi Pro, an exchange that only deals in cryptocurrencies and doesn’t deal with fiat currencies. That allows users to exchange Bitcoin, Litecoin, Ethereum, and other cryptocurrencies. By not dealing with fiat currencies, it allows investors to readily exchange their cryptocurrency assets for other cryptocurrencies while isolating themselves from any pressure the government could put on them through the banking system.
Huobi also quickly moved its business offshore, and is currently looking to expand its operations by opening up offices in Hong Kong, Singapore, and the United States. At the time of writing, Huobi remains the third-largest cryptocurrency exchange in the world.
OKCoin’s OKEx exchange remains the world’s largest, just ahead of Binance, another Chinese exchange that started its operations offshore and happened to be in the right place at the right time as it capitalized off the Chinese government’s trading ban. Obviously the Chinese government isn’t happy about these exchanges continuing to thrive, as it continues to monitor overseas cryptocurrency exchanges. The government is certainly going to try to do everything it can to make sure to limit Chinese investors’ access to cryptocurrency investing.
The Chinese exchanges’ resilience is a good sign for the overall health of cryptocurrency markets and for other cryptocurrency investors such as Bitcoin IRA investors in the US. It demonstrates that even a full government crackdown in one of the world’s largest markets can’t deter cryptocurrency businesses and the services they provide to investors. That means that nothing should stand in the way of the continued adoption of Bitcoin and other cryptocurrencies.