They want to be able to make a profit enough to buy a house as soon as possible. Even if crypto market trading is considered illegal, they still buy and sell digital currency with high risk.
Wendy Li is a 32-year-old independent content producer, living in Shenzhen. Over the past few months, she and her boyfriend Henry Yi – a 29-year-old photographer and video editor, and many friends have been surfing the crypto waves.
Excitement for the cryptocurrency market has quickly spread among the Chinese youth community, including Generation Y and the mature group of Generation Z. They enter the market through your recommendations. Friends or followers of KOLs, even if cryptocurrencies are notorious for their volatility.
Li said, “Apart from us, a lot of our friends, colleagues, and roommates are all investing in cryptocurrencies. The attraction of this market is so strong that when a friend starts investing, a few people start investing. Other acquaintances were also ‘tempted’.”
China’s young, urban population in their 20s and 30s is joining the same trend as in the US, South Korea, and Japan. They all think of cryptocurrencies as their last chance to overcome class barriers and put themselves in the well-off class.
In particular, people living in Shenzhen – China’s technology hub, where millions of people work in technology, finance, and the internet, are very interested in the concepts of globalization and emerging digital property. Accordingly, the cryptocurrency market value skyrocketed and KOLs became the driving force of their dreams.
Due to China’s strict control of information and foreign exchange transactions and financial investments abroad, young investors here are willing to accept more risks than young Japanese or Koreans. Accordingly, information about the scale of cryptocurrency investment in China is also quite meager.
However, in a Weibo survey earlier this month, users were asked whether retail investors have invested in cryptocurrencies, 44.8% of the 29,000 respondents said they have invested. On the social media site alone, searches for “Bitcoin” led to hundreds of posts that reach more than 11.7 billion views. Articles about Bitcoin are also posted on other Chinese social media sites.
Although Beijing has introduced new regulations in the past few weeks to restrict investment in cryptocurrencies, many young people are still excited to share their investment activities on social networks every day. Many people boast about their investment achievements and say they can buy properties worth 75 times their money.
Simon Zhao, deputy dean of the Division of Humanities and Social Sciences at the BNU-HKBU United International College (UIC), said: “Chinese young people often use mobile phones to buy stocks and other securities, as well as get loans online. Therefore, investing in cryptocurrencies with them is also very easy.”
A report by data consulting firm MobTech found that more than 80 million Chinese investors used the app to invest last year. The number of individuals investing through mobile apps has exceeded 20 million, 52.9% of whom are under 30.
Mr. Zhao said that young Chinese people are more interested in speculation than the group of 40-50 years old. They are not enthusiastic about long-term investments. Moreover, the high-risk, high-return speculative market has always been a factor favored by young Chinese.
A life-changing opportunity?
Back to Li and Yi. The couple is among people who are excited about catching up on trends. Li said her monthly income is 10,000 yuan. She lives in a three-bedroom apartment with three other roommates. They are also speculating on cryptocurrencies.
Li shared: “In April, I met a girl my age in Shenzhen. She worked for a fintech startup and made millions of dollars speculating in cryptocurrencies last year. I was especially impressed by the decentralized concept of cryptocurrencies that she said.”
She added: “It means that young people like us can disrupt the current economic potential and power in creating wealth. The use of money should not just be in the hands of a few groups, like Wall Street or governments.”
In April, Li and Yi jointly invested 80,000 yuan ($12,500) through ZB.com, one of the few cryptocurrency exchanges authorized to operate in China.
They bought Tether for 6.47-6.81 yuan from others through the app, then bought more Uni, Dot, Ether, and Litecoin. After a few weeks, their book value rose to 100,000 yuan, but when the market crashed in May, they invested another 30,000 yuan.
In April, Li and Yi jointly invested 80,000 yuan ($12,500) through ZB.com, one of the few cryptocurrency exchanges authorized to operate in China. They bought Tether for 6.47-6.81 yuan from others through the app, then bought more Uni, Dot, Ether, and Litecoin. After a few weeks, their book value rose to 100,000 yuan, but when the market crashed in May, they invested another 30,000 yuan.
Now, the value of this investment has halved, giving them a different view of the cryptocurrency market. Li said she feels the risk is growing as more governments control cryptocurrency mining and business.
However, Yi wants to catch the bottom and believes that the market will rise again as before. “Cryptocurrency is the only chance that young working-class people like us can get rich quickly, even though the risks are very high,” he said.
“If we don’t grasp, we will never have enough money to buy an apartment in Shenzhen,” Yi said. Therefore, a lot of young people even borrow to speculate. “Typically, you just press a button on your phone to increase the leverage by two or five times, even higher,” he said.
Lack of information
Many young investors in China do not understand much about the technical indicators, or the operating logic of the cryptocurrency market. Its response to changes in the market has also been slow due to Beijing’s restrictions on the internet information and overseas investments.
Guo Zhongxiao, an independent commentator on the digital economy in Shenzhen, said: “Most young people in China don’t pay much attention to the correlation between cryptocurrencies and the price of gold, the dollar, and inflation expectations. global broadcast.”
Meanwhile, Frank Cui, a scientist at blockchain company dataqin.com, said cryptocurrency investments in China are riskier because the government considers the transaction illegal. They also don’t have enough information to judge the market. “Cryptocurrency investing is like gambling in China, with no price limits nor regulatory protections,” he said.
After reportedly buying around 280,000 yuan ($44,800) in Bitcoin, Ether, Dogecoin, and Shiba Inu since February and profits have doubled since then, one internet user from the e-commerce business manager became a financial blogger. She has 70,000 followers on Weibo.
This person has become a cryptocurrency “star” when sharing the comments of Elon Musk, Lawrence Summers, and other famous foreign figures outside of China’s “firewall”. She said, “It doesn’t matter if my account is locked. I still have 90 million Shiba Inu. What if SHIB is priced at $0.10 at some point? It’s still worth the bet”./.