NetworkNewsWire
Editorial Coverage: The widespread adoption of cryptocurrencies
and blockchain technologies is all but inevitable. The technologies
demonstrate numerous consumer and commercial advantages,
particularly in logistics, international trade, and even
food-safety and product anti-counterfeiting drives. As global and
online commerce expands, so does the need for streamlined
verification of product quality, delivery and payments, a few of
the many capabilities offered by blockchain technology. An emerging
leader in this space is ChineseInvestors.com (CIIX)
(CIIX
Profile), which, among other
cryptocurrency-related endeavors, recently opened a bitcoin ATM at
its U.S. headquarters in California. Other companies operating in
the cryptocurrency and blockchain space include MGT Capital
Investments, Inc. (MGTI), Bitcoin Investment Trust (GBTC), LongFin
Corp. (LFIN) and Overstock.com, Inc.
(OSTK).
China’s Growing Middle and Upper Classes
Many experts see China as the next big frontier for
cryptocurrencies and blockchain technologies. Of course, the big
fundamental is that the world’s second-largest economy is now
China, topped only by the United States. Moreover, at current
annual economic growth rates of just under 7%, China’s gross
domestic product (GDP) should about double in the next 10 to 12
years. Given the size of its population, China will eventually
eclipse the United States as the world’s largest economy.
The rapid emergence of Chinese middle- and upper-classes creates
a large pool of consumers who want assurance of product provenance
and delivery, as well as an avalanche of new investors who will
seek to place a portion of their portfolios into cryptocurrencies -
not only as a pure investment, but to ease investment into other
asset classes, and to effect transactions.
“If you carry the trends forward, it is probable that Chinese
investors will be the richest group in the world within 20 years or
less,” ChineseInvestors.com (CIIX) CEO Warren Wang recently
stated.
Since its inception in 1999, CIIX has become a leading financial
information website for Chinese-speaking investors in the United
States and China. To sharpen its focus on cryptocurrencies and
financial education, the company has decided spin-off its CBD
Biotechnology and ChineseHempOil.com subsidiaries (http://nnw.fm/sri0Y), which it plans to register as a
separate publicly traded company.
This move will enable CIIX to allocate it resources toward
educating the Chinese public regarding cryptocurrencies and
blockchain technologies, along with related marketing and
operational efforts.
Recognizing the Chinese community’s mounting interest in
cryptocurrency, CIIX currently broadcasts a daily newscast,
“Bitcoin MultiMillionaire,” operates its free bitcoin Chinese
language education site, www.newcoins168.com, and recently reached agreement to
host a bitcoin ATM in the lobby of its headquarters in San Gabriel,
California.
Sino wealth creates prospects for investment
products
“The signs of accumulating capital in China are obvious, from
soaring condo prices in major cities such as Shanghai, to top
dollar paid for authentic Sino antiquities. The Hong Kong Hang Seng
Index, which is heavily tied to mainland-listed companies and the
Sino economy, is up 50% in the last 12 months,” observes Wang.
“Labor is also becoming more expensive—so much so, that some
manufacturers are already off-shoring to cheaper platforms, such as
in Southeast Asia.”
As incomes rise, Chinese citizens “can accumulate savings, as
they have long wanted to. China has a high savings rate,” explains
Wang. “The prospects for investment products that are properly
positioned in China are extraordinarily bright.”
Beijing ban
However, Chinese authorities in a series of rules stretching
back into early 2017 have made it increasingly difficult for Sino
residents to trade in cryptocurrencies, including a ban in
September on exchanges trading in bitcoin. Some of China’s largest
cryptocurrency exchanges, including OKCoin and Huobi, halted
trading between bitcoin and yuan, awaiting more clarity from
financial regulators.
The China-based BTCC was the world's oldest bitcoin exchange,
but closed down last year under pressure from Chinese authorities.
New ICOs are also banned in China.
China Investors Adapt
“Despite regulations, Chinese investors have demonstrated they
want to bitcoin and other cryptocurrencies to be part of their
assets,” observes Wang.
Many Chinese investors are selling and buying cryptocurrencies
through unregulated, over-the-counter exchanges, after the official
ban on conventional exchanges from trading in the digital
currencies. Notably, the unregulated trading is still legal.
“The present environment for cryptocurrencies in China requires
for even more-knowledgeable participation by Chinese consumers and
investors, and thus even a greater need for education and
insightful commentary,” noted Wang. “Evolving environments usually
offer more challenges but more opportunities that static
situations.”
Wang advised industry entrepreneurs to be patient with Chinese
investors while Sino residents learn about digital wallet
management and the processes for trading in bitcoin and other
cryptocurrencies. He also expressed confidence that China will
organize a regulated market for cryptocurrency trading in the
future.
In addition, Chinese monetary officials appear to be migrating
to a national cryptocurrency system, the details of which have yet
to be worked out, or at least made public. A researcher at the
People's Bank of China (which is the nation’s central bank and
monetary authority) told a public forum in November that it is
“crucial" that the country organizes an official central
bank-issued cryptocurrency at an early date.
In the past, Beijing has often undertaken initiatives in
commerce, but then increasingly relied on the private-sector to
bring visions to fruition. Indeed, speaking at the international
World Economic Forum in January 25, Liu He, regarded as President
Xi Jinping’s top economic planner, told the global financial elite
in Davos that China would be even more engaged in economic
“reforms” going forward, usually an expression that means increased
reliance on market forces. If and when the People’s Bank of China
implements a national cryptocurrency, it too may invite increasing
participation from the private-sector to make such a currency as
efficient and universal as possible. To date, mainland officials
have only run trials of a prototype national cryptocurrency.
Meanwhile, the private sector is evolving networks of talent and
financiers to help the blockchain industry develop in China. For
example, in 2015 the China-based Fenbushi Venture Capital, with
Vitalek Butarin, the founder of Ethereum, as adviser. Fenbushi’s
general partner is Feng Xiao, founder of Bosera Asset Management,
one of the first and largest mutual funds in China. The use of
blockchain technology to identify counterfeit goods, and prevent
their online dissemination, may be one of the first widely adopted
uses of the immutable ledgers enabled by blockchain systems.
“Whatever the shape of the China economy going forward,
cryptocurrency and blockchain technologies will play a key and
growing role,” said Wang. “There will be a vast and increasing need
for informed reporting and education in these topics, for
consumers, investors and entrepreneurs.”
Wang added that there is tremendous opportunity for
ChineseInvestors.com to bring added revenue and profitability to
its shareholders as the huge Far East investment community seeks
timely insights into the presently volatile market of bitcoin and
other cryptocurrencies. Wang urged entrepreneurs and venture
capitalists to be patient in China, both with the population and
the government. “Throughout history, in every nation, the best
technologies are ultimately adopted,” advised Wang. “Beijing wants
the China economy to modernize, to become integrated with the
global economy. Cryptocurrencies and blockchain technologies will
help with those goals.”
Potential Blockchain Comparables
MGT Capital Investments (MGTI) operates
subsidiaries developing a portfolio of cybersecurity technologies.
The company address cyber-threats through protection technologies
for mobile and personal tech devices, as well as corporate
networks. MGTI also operates a bitcoin mining operation.
Bitcoin Investment Trust (GBTC) is a U.S.-based
open-ended grantor trust, sponsored by Grayscale Investments, that
invests exclusively in bitcoin, which of course, is the pioneering
use blockchain technology to verify ownership and confirm
transactions. Bitcoin Investment Trust is the first publicly quoted
bitcoin investment enterprise, with its shares the first securities
to be solely invested in and deriving value from the price of
bitcoin. BIT enables investors to gain exposure to bitcoins through
a traditional and liquid investment vehicle, without the challenges
of buying, storing and safekeeping bitcoins. BIT, along with
bitcoin futures-trading recently undertaken by Cboe Global Markets
(CBOE) and the CME Group (CME), thus broadens the market and
reduces the risk of investing in, owning and or using bitcoins in
transactions.
LongFin (LFIN) is working to connect 70 FX and
spot exchanges with 300 banks through its electronic market
platform. Earlier this month, LongFin announced that its Ziddu
Smart Contracts are commercially available on the Ethereum
blockchain. Longfin contends Ziddu.com is currently the only venue
for decentralized smart contracts. The Ziddu contracts allow for an
open but immutable ledger, decentralized verification, and
transparent execution. Ziddu also offers micro-finance and lending
against collateralized warehouse receipts.
As one of the earliest retailers to accept bitcoin payments,
online retailer Overstock.com (OSTK) in December
2017 launched a $250 million initial coin offering (“ICO”). Company
CEO Patrick Byrne told CNNMoney he may even consider selling off
the better-known online retail business to focus on the 10
blockchain companies it owns.
For more information on ChineseInvestors.com, please visit:
ChineseInvestors.com (CIIX)
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