Understanding Chinese Crypto Investors

If you don’t know much about the Chinese crypto market, it has always been very political. I once told a friend if China was a democracy, it would be like the crypto market today. The Chinese crypto scene has always been a clan-like society in which you have several popular clans with many followers and subordinates. When our market is doing well, these clans are self-sustaining themselves quite well . When the market is bearish, everything is much more dramatic and chaotic. This leads to the core topic of this post. What happens to these clans when we’re in a bearish market, and what can we learn about Chinese investors? Well, I like to use the following diagrams to illustrate the scenarios here.

To make things simple, during a bullish market its difficult to identify who your investors are: if they’re value-add investors or not, and how are they value add investors. I’ve used the example of water being wealth (as water translates to wealth in Chinese), spikes and pillars being Chinese crypto investors, and tides being our market. When the tides are high and the there is plenty of water covering the spikes and pillars, it is safe to swim. When the tides are low and water levels drop, the spikes and pillars reveal themselves, thus making it very difficult to swim as every pillar you swim into is a direct hit on the head.