China's Hidden Bitcoin Market: Why Demand Keeps Rising Despite the Ban?

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In 2021, the Chinese government officially banned Bitcoin trading. However, the buying and selling of this digital asset continues through various unofficial channels. The demand for Bitcoin China 2025 among Chinese citizens remains high, primarily through over-the-counter (OTC) Bitcoin market trading and underground markets operating outside regulations. Despite strict rules, various strategies are still being used by individuals and groups looking to own or invest in Bitcoin. This article explores why China Bitcoin demand remains strong, how it is traded, and its impact on the global market and Bitcoin price impact China.

Methods Used by Chinese Citizens to Access Bitcoin

Since the Bitcoin trading bans were enacted, trading has shifted to OTC channels and peer-to-peer (P2P) networks. The lack of direct trading pairs between the Chinese yuan (CNY) and Bitcoin on official exchanges makes transactions difficult for the government to monitor. However, Chinese citizens can still acquire Bitcoin through OTC Bitcoin market services embedded within major trading platforms or operating independently.

These OTC services function like private banks that trade digital assets in exchange for fiat currency. Some traders register as individual sellers on major platforms and pay escrow fees to offer their services. Typically, transactions involve transferring funds to bank accounts registered with smaller or lesser-known banks, making it harder for China cryptocurrency restrictions authorities to detect.

One popular strategy is purchasing USDT trading China first and then exchanging it for Bitcoin or other cryptocurrencies on overseas exchanges. Since the USDT/RMB spread is smaller than the BTC/RMB spread, many traders prefer using Tether in China as the initial step in their transactions. Once they have USDT, they can trade it for Bitcoin on secondary trading platforms.

Hong Kong as a Bitcoin Trading Hub for Chinese Citizens

Hong Kong Bitcoin trading plays a crucial role in the China crypto market 2025. While strict Bitcoin trading bans apply in mainland China, Hong Kong remains a financial hub more open to Web3 innovation and digital assets. The region has developed regulations allowing legal Bitcoin investment China, including the launch of spot and futures Bitcoin ETFs.

Many investors from mainland China seek ways to access the Bitcoin underground trading market through Hong Kong, despite legal restrictions. Some use intermediary companies or private networks to reach Hong Kong Web3 hub exchanges. With the growth of the Web3 sector in the region, Hong Kong has the potential to become a key bridge for Chinese investors wanting to participate in digital asset trading.

Indicators of Bitcoin Demand in China

Tracking the exact amount of Bitcoin traded in China is challenging, but data suggests increasing demand for the asset since 2021. Blockchain analysis firms like Chainalysis have reported a significant surge in OTC Bitcoin market trading in China over the past few years. Since the China Bitcoin investment ban was implemented, Bitcoin demand has increased fourfold on a quarterly basis.

Additionally, online forums and discussions on Western social media indicate that cryptocurrency trading remains a hot topic among Chinese citizens. Mandarin-language discussion rooms on platforms like X (formerly Twitter) are often used by traders to share strategies and experiences using OTC services.

The Bitcoin Asia 2024 conference also recorded a large number of attendees from mainland China, suggesting that interest in China Bitcoin demand remains strong despite crypto regulations China.

Is the Chinese Government Involved in Bitcoin?

There is speculation that the Chinese government may still hold Bitcoin reserves from seized assets linked to cryptocurrency fraud cases. One notable case is PlusToken, where authorities confiscated approximately 15,000 Bitcoin. However, there is no concrete evidence that the China crypto market 2025 is actively trading or holding large amounts of Bitcoin.

The Chinese government is more focused on developing blockchain technology without adopting Bitcoin as an alternative currency. They have launched the digital yuan (e-CNY) as the official digital currency, but its adoption has been slow. Most Chinese citizens still prefer using Alipay and WeChat Pay over e-CNY vs Bitcoin.

The Impact of Chinese Bitcoin Demand on Global Markets

China Bitcoin demand significantly impacts Bitcoin price impact China. Before the ban, China was a major hub for Bitcoin mining China 2025. Therefore, shifts in demand from China continue to influence overall market dynamics.

Although Bitcoin trading bans are in place, high OTC Bitcoin market activity shows that capital flows from China into cryptocurrency markets remain substantial. This demand can drive Bitcoin prices higher, especially during bullish market conditions. Conversely, if the Chinese government tightens crypto regulations China or cracks down on more OTC services, Bitcoin price volatility could increase.

USDT (Tether) also plays a crucial role in this ecosystem. Since many Chinese traders use USDT trading China as a bridge before buying Bitcoin, fluctuations in USDT demand can indicate Bitcoin trading activity in the region. Interestingly, even though the Chinese government aims to reduce dependence on the US dollar, every Chinese purchase of USDT indirectly supports U.S. Treasury liquidity

Despite the Chinese government's ban on Bitcoin

Despite the Chinese government's ban on Bitcoin trading since 2021, demand for the asset remains high through OTC Bitcoin market channels and foreign exchanges. Chinese citizens continue to find ways to buy Bitcoin, primarily by converting USDT trading China before trading on global platforms. Hong Kong Bitcoin trading serves as a vital trading hub, providing a safer and more legal way for Chinese investors to access Bitcoin.

Strict crypto regulations China have not halted Bitcoin's growth but have instead pushed it into underground markets and OTC networks that are harder to monitor. The sustained China Bitcoin demand will likely continue to support Bitcoin price impact China, although uncertainty remains about how future Chinese government policies may impact this trend.

With the digital yuan (e-CNY) still in its pilot phase and China’s ongoing interest in blockchain technology, Bitcoin's future in China remains an intriguing topic. Whether China will further tighten Bitcoin trading bans or allow OTC markets to thrive remains an open question for global investors. What is certain is that Bitcoin remains a favored asset for many Chinese citizens, despite facing regulatory challenges.

Writer: Chrycentia Henryana