Chinese investors flock to Bitcoin amid inflation fears

China is turning its attention to Bitcoin and producing large quantities of the currency amid concerns about the stability of global financial growth, the chairman of Smartpay Group said.

A recent article in the South China Morning Post highlights the fact that despite the Chinese government’s cautious attitude towards Bitcoin, there are still many active exchanges in the country with a large number of Chinese people involved.

The author of the article pointed out two points. First, China is a country with a very developed banking industry. It only takes ten minutes for anyone, rich or poor, to open a bank account. Second, Chinese banks and post offices can provide high-quality remittance services.

The author states:

It is hard to imagine that in such an environment Bitcoin can still provide cheaper and more efficient money transfer services.

Of course, one of the reasons for the rise in Bitcoin's popularity in China is fear of inflation. The author said that although many people believe that the high volatility of cryptocurrencies will prevent others from becoming a currency, the author does not think this is the case.

Take the price of gold, the exchange rate of the Russian ruble and the Nigerian naira as examples. They are also unstable, but this does not affect their currency circulation. More importantly, Bitcoin users hold their Bitcoin as part of their asset diversification, so high price fluctuations do not matter much as long as the long-term trend remains positive.