Industry News Bitcoin is Slowly winning over Mainland Chinese Adopters

Bitcoin is Slowly winning over Mainland Chinese Adopters

December 30, 2020

The problem of bitcoin adoption remains an ever-pressing issue in all of the world, including its potentially biggest market – mainland China. Presently the only major economy that will see any growth in the terrible 2020, this country keeps on being a mystery for so many industries. Bitcoin and cryptocurrency in general are a good example of this notion as well. Even though the nation is otherwise very tech-friendly and ready to embrace any number of technological improvements, like the massively popular esports, for example, the territory has not provided the same enthusiasm for digital currencies up to this point.

Now, however, the winds of change seem to be blowing across the country and offering a new outlook that could stand to reinvigorate the Chinese crypto market. That process could establish it as one of the major forces in the same field and do it in a mere couple of years. Then, the buying power and the size of the market could begin to establish their dominance. Furthermore, the same dominance could exert itself even over presently established and heavyweight markets, like the US for example. However, things are still far from certain about the present change in perception when it comes to bitcoin and owning this cryptocurrency.

2020 Economic Pressures

China has not seen anything different than the rest of the planet when it comes to the economy and 2020. It too has suffered immensely during this incredibly difficult period in modern history. Because of the huge spread of COVID-19 coronavirus, the second biggest economy in the world also entered the phase of extreme financial difficulty. It was among the first countries to experience this slump in an economic activity simply because of the fact that the pandemic originated inside of its borders. However, the silver lining in all of this is the fact that as this pandemic spread, China managed to contain its own virus spread.

In fact, this nation is widely regarded as one of the biggest successes of the coronavirus containment approach. That provided some important and essential boost to the economy in this trying period. Because of that, China is ending the year as the only major economy that will see some level of positive growth when it comes to its GDP. But, the local population has no doubts that the trying period for them and their families is only beginning. This was one of the Essential precursors to many who started considering buying bitcoin tokens.

Chinese Baby Boomers

Interestingly enough, it appears that the main engine of BTC adoption in the upcoming period will not be the tech-savvy, young population that usually embraces cryptocurrencies. Instead of esports players, and social media community managers, the Chinese baby boomer generation is expected to start buying digital currencies in the 2021 and years that follow. The reason for this is the sheer fact that in the majority of Chinese households, first of all, these individuals are those who control the majority of the family budget.

Traditionally, these were men but now the same role as the head of the family is also getting filled by women in the modern-day and age. But, the fact that they are usually older and a part of the working population did not change. Now, however, these heads of families realize that there is a big chance that the Chinese economy will once again undertake a massive program of yuan devaluation. The objectives of such programs would be to make the local economy even more competitive on a global scale. But the fallout would also include a substantial loss in savings that any of those families has right now.

Repeat of History

The scenario of yuan evaluation is nothing new and it already occurred once in the 2014 and 2015 period. Back then, savings of millions if not hundreds of millions were slashed drastically because the government decided to make its economy more able to take on the rising power of India and other growing industrial powerhouses of Asia. The plan worked but a lot of people still had a massive drop in their household savings. Now, only a few can afford the mindset that the same will now occur in 2021 and beyond.

After all, China will try to take advantage of the present and post-pandemic situation no matter if that means trying to get back on their feet or trying to exploit the present advantages even further. In both cases, the chances of Beijing staying idly by as the China economy rebounds from the 2020 disaster is almost non-existent. With no possibility of purchasing other fiat currencies like the Euro or the USD, many Chinese citizens and especially those near the senior period in their lives, are taking on bitcoin as a form of protection against that loss of yuan’s value.

Risky Move

Even though the appeal of bitcoin for the Chinese middle class is clear, there are still hurdles that will complicate mass adoption. First, all the baby boomer generation is that which in general has a low desire to confront the central government. So, they will need to willingly go against any rules on hoarding foreign currency, which buying BTC actually is in the eyes of the regulators. Also, the practical procedures behind any purchase of digital currency likely will have many potential pitfalls for all older first-time users.

It is true that China has access to a range of digital financial services many of which came here before their western counterparts. Yet, buying directly cryptocurrencies on any of them is still a big difficulty for all ordinary citizens. That too will likely turn off many from exploring the possibility of buying bitcoin in any substantial manner. In China, like all over the world, this combination of playing it safe and avoiding things a person does not understand is completely expected in any form of finance. But, even all of that cannot dismay everyone from moving some of their savings into bitcoin tokens and thus protecting them from any government action that would otherwise drastically lower the value of their family funds.

Source: Coindesk