China coins are growing in popularity among crypto traders and investors recently.
We have picked a China Coins 21 List consisting of 21 China-connected crypto that together have averaged a return of 119% year to date.
We excluded the Conflux price from the mean calculation, because it is up a massive 1,316% and would skew the results. Conflux is, however, a member of the China Coins 21 List.
In the past 7 days alone, Conflux is 452% higher, COCOS BCX (COCO) is surging 216%, NEO’s price improved 57% and Filecoin 53% the better. Only one of the coins is in the red – Immutable X (IMX) down -13%.
All the rest are winners. Here’s a few more – some you will know, others more obscure: Nervos Network (CKB) is up 44%, VeChain (VET) 26%, Ontology (ONT) 23%, old stager EOS. Klaytn, which is actually a South Korea-based crypto project but has a China following, is up 43%.
(Note: All tables and chart dates correct as at 21 February 2023. Price data source Messari)
Why China Coins are on fire right now
Hong Kong is opening up its retail crypto market, the Chinese government is Ok with that and the end of Zero Covid policy on the mainland saw the People’s Bank of China halt rises in interest rates on Monday (20th February).
Taken together, these could be seismic changes for the crypto market globally, possibly igniting a new crypto bull run.
China banned crypto in 2017, so surely any favorable moves by Hong Kong are likely to be of limited significance for the digital asset complex, some will say.
Also, Hong Kong is still moving relatively cautiously, by signalling that its licensing regime will only cover the most liquid coins, such as bitcoin and Ethereum.
But against the background of a clampdown elsewhere in the financial system, most significantly in the US, the contrarian background noise from China stands out.
So we shouldn’t be too fast in dismissing Hong Kong’s attempt to position itself as a global crypto hub, or to see it as merely a display of intra-region rivalry with Singapore.
China banned crypto but trading still goes on – VPN is your friend
There has been a tendency to overstate the impact of the Chinese government’s ban.
Although citizens are banned from trading onshore, offshore trading 0ver VPN is widespread. And even though exchanges are banned from operating in the country and banks are not able to take crypto-related business, it is still perfectly legal for Chinese citizens to hold crypto.
Then there is the Hong Kong exception – a favorite destination for well-heeled middle classes and high net worth individuals to access the more open economy there, which includes crypto assets, licensed or not.
But with the mainland minder officials from the Liaison Office frequenting crypto events in Hong Kong, it appears that the Communist Party is more than happy for the crypto experiment to take place in the relatively safe confines of Hong Kong.
Hong Kong can be a sandbox for innovation without undermining the Digital Yuan
Confining – at least at the geographical level – crypto to Hong Kong means there will be less for the government to worry about regarding contamination and contagion vis a vis the traditional financial system.
There would also be no fear of competition of private crypto money with the Digital Yuan in the gray-black economy.
Another factor is the Chinese central bank loosening up on monetary policy with its surprise pause in rate hikes, is positive for risk assets, of which crypto is one. Just like elsewhere in the world economy, higher interest rates are seen as bad for growth sectors such as crypto. That means the converse is also true.
Add to that the penchant for risk taking and speculation in the Chinese retail investor market, and there could be a wall of money headed into crypto. It may have already begun, if the reports of strong crypto trading numbers coming out of DBS are anything to go by.
Finally, let’s recall that blockchain technology was mentioned by the Chinese leadership as one of the key technologies of the Fourth Industrial Revolution.
Unlike in the West, China already has a well-advanced framework in place to facilitate distributed ledger technology adoption, and its quasi private companies are making significant investments, even if there is still relatively little to show for it at the consumer level.
Conflux return (YTD) against the China Coins 21 List average (ex Conflux)
How to play this new emerging China coins narrative
We have identified 21 coins that could be considered for China exposure. Some of them are projects that are official partners of the government initiated Blockchain Services Network. Others are not even Chinese but have significant partnerships with Chinese companies or have a following, for whatever reason, among Chinese traders and investors.
There are a mixture of small cap and large cap coins to consider and a wide spread of industries in which they are involved, from supply chain and AI to gaming and ID authentication.
Old hands in the crypto world feature, such as NEO, which has long been touted as the ‘Chinese Ethereum’, with a market cap of around $1 billion. EOS is another blockchain layer 1 that has been around for a while by crypto standards, and has many Chinese investors.
At the other end of the spectrum are coins such as Cortex Labs (CTXC) with a market cap of $64 million and a penchant for perpetual reinvention – it is now getting into AI.
What makes Filecoin and Polkadot candidates for China Coins 21 List?
Among the largest cap coins in our China Coins 21 are two perhaps unlikely candidates – Filecoin (FIL – $3 billion MC) and Polkadot (DOT – $8.7 billion MC).
Both are included because of their following in China. Filecoin’s largest service provider for some time was RRMine, which only left China in September 2022.
Also, Chinese firm Ewieson uses Filecoin for data preservation.
Polkadot, on the face of it, might seem more of a stretch for inclusion in our China Coins 21, but is a much-loved coin of crypto followers in China.
Co-founder of Polkadot, Gavin Wood, lives in Shanghai part of the year and is well-known on the crypto scene in the country.
Blockchain lab Parity and the Web3 Foundation have also both been instrumental in funding Chinese developers with grants to work on the ‘blockchain of blockchains’ projects – 20% of Polkadot Web3 Foundation developer grant recipients are thought to reside in China.
For more data on returns over various timeframes for each of the 21 China Coins, please see the table below:
Profiles of all the coins selected for the Business 2 Community China Coins 21 List
|Conflux Network · CFX||
Layer 1 blockchain. Recently signed a China Telecom deal. Also provide tech for Little Red Book – China’s closest thing to Instagram.
|Cortex · CTXC||
Reinvented itself several times. Now pivoting to AI.
|EOS · EOS||
One of the original Layer 1s. Big Following in China, where co-founder Gavin Wood speds a lot of time. Web3 Foundation, Parity and Wood together are dishing out plenty grants to developers
|Filecoin · FIL||
Decentralized storage crypto Filecoin’s top service provider was Chinese company RRMine, which left China in September 2022. Also has a deal with Chinese company Eweison which use Filecoin storage for data preservation
|Huobi Token · HT||
Top crypto exchange. Founded in Beijing in 2013. Tron founder Justin Sun heavily involved. Recently announced it was setting up shop in Hong Kong
|Immutable X · IMX||
Actually based in Australia but this blockchain gaming projecy has substantial investment from Tencent
|Klaytn · KLAY||
Enterprise blockchain. A South Korean project that is often viewed as Chinese. Has Chinese VC investors such as IDG China, which also invests in Ripple
|Measurable Data Token · MDT||
Self-soverign data – monetize and control your own data
|NEO · NEO||
Formerly called AntShares and founded by Da Hongfei and Erik Zhang in 2014. rebranded as NEO in 2017. Often referred to as the ‘Chinese Ethereum’
|Nervos Network · CKB||
Builds ‘universal decentralized application’, so takes a cross-chain approach. A member of China’s official Blockchain Services Network (BSN)
|NKN · NKN||
Has an inportant hosting partnership with Baidu-owned online entertainments platform iQIYI
|OKB · OKB||
Utility token of the OKX exchange. Roots in China although HQ is now in the Seychelles. Fiunded by Star Xu in 2017
|Ontology · ONT||
Platform was created by the China-based OnChain team and crypto experts Erik Zhang, Jun Li and Da HongFei in 2017
|Ontology Gas · ONG||
ONG is the utlity token to pay for transactions on the ONT network
|Phoenix Global · PHB||
Focuses on scalable smart consumer dapps (mostly on BNB Chain). Tencent Cloud is a big investor. Neo also invested. Founded in 2020.
|Polkadot · DOT||
Co-founder of Polkadot, Gavin Wood, lives in Shanghai part of the year. 20% of developer are estimated to be Chinese. DOT community is large and vibrant in China.
|QLC Chain · QLC||
Telecoms focused blockchain. Based in China.
|VeChain · VET||
Launched by Sunny Lu and Jay Zhang in 2015. Supply chain blockchain.
|VeThor Token · VTHO||
Facilitates processes and transaction on VeChain. Sunny Lu is the former chief information officer of Louis Vuitton China.
|Waltonchain · WTC||
Supply chain and infrastructure blockchain. Competes with VeChain. Is invovled in a number of Chinese government contracts. Technology focuses on IoT, RFID (radio frequency identifiers) chips.