How is China’s relation with Bitcoin, and Beijing’s relation to its billionaires, playing out in the Bitcoin world?
Everyone loves Bitcoin. Personally, I can’t get enough of it. Though I just sold all of my XRP, as an aside, because I learned it was being delisted from Coinbase next week, Bitcoin, on the other hand, I am keeping for the moonshot. Now that Grayscale has its Bitcoin Trust exchange-traded fund, the market cap for Bitcoin has hit a trillion dollars. It is approaching $40,000 per coin. We know the role central banks are playing in BTC’s rise: debasement of currency via money printing. But what about China? This is the most curious one for me, especially following what appears to be the self-exile of Jack Ma, the billionaire founder of Alibaba BABA. Ma got into some trouble with Beijing regulators following the postponed listing of his fintech company Ant Financial, owners of AliPay, which is ubiquitous in China (you can also find it at your local CVS for some reason). Now there is talk of breaking up the Jack Ma tech empire, something akin to what anti-Big Tech advocates here in the U.S. have been asking be done of Google and Facebook. One can almost see Chinese billionaires buying up Bitcoin, just in case Beijing comes for their wealth. Lord knows the dollar is in decline, and they probably already own a ton of stocks. The Chinese currency, out of all the G10 currencies, has the strongest statistical correlation to BTC over the last 12 months, at around 84%. That means that as the RMB gets stronger against the dollar, so does Bitcoin,84% of the time, says Vladimir Signorelli, head of Bretton Woods Research in Long Valley, New Jersey. “When Bitcoin rises, the RMB is rising right along with it,” he says, adding that the euro has a 74% to 75% correlation with Bitcoin. The Russian ruble has a 25% correlation. And then there is the Jack Ma effect. He’s the “canary in the coal mine” says Signorelli. “There could also be an internal dynamic in China keeping Bitcoin bullish,” he says. “You have Jack Ma’s total disappearance since October. Was it a canary in the coal mine for every millionaire and billionaire in China that you need to have a Plan B? There is a real risk of outright confiscation of your wealth. They see it clearly now.” China’s crypto market has a massive user base. Singapore-based ZB.com Exchange is one of the top four exchanges that are popular among Chinese users. “Our in-app community is very active with Chinese users right now,” says Oman Chen, ZB’s CEO.
