In the past twelve months, Chinese investors have moved nearly $50 billion in cryptocurrency outside of China. But such a high capital flight did not result in Bitcoin bearish trend, but on the other hand, its bullish trend remains intact.
On-chain data firm Chianalysis unveils that Chinese investors sent $50 billion overseas via Tether (USDT). According to many analysts, capital flight on the part of Chinese may impact Bitcoin price but it is not yet true. Researchers at Chainalysis stated:
“Over the last twelve months, with China’s economy suffering due to trade wars and devaluation of the yuan at different points, we’ve seen over $50 billion worth of cryptocurrency move from China-based addresses to overseas addresses.”
As investors prefer Tether over other cryptocurrencies, the market cap of USDT reached new all-time, and it captured third slot on CoinMarketCap by market capitalization.
Chinese authorities have made it difficult for investors to move a large sum of money overseas, but the Chinese have done this via stablecoin Tether. It means that they would sell cryptocurrency capital and would get cash which may pour a negative effect on Bitcoin markets.
Chainalaysis further said that not all investors sent money as capital flight. “Obviously, not all of this is capital flight, but we can think of $50 billion as the absolute ceiling for capital flight via cryptocurrency from East Asia to other regions,” Chainalysis’s researchers said.
BTC Markets Remained Unaffected
More than $18 billion transferred from East Asia to addresses based in other regions. And it is still unconfirmed that all this is capital flight. Chainalysis added:
“In total, over $18 billion worth of Tether has moved from East Asia addresses to those based in other regions over the last 12 months. Again, it’s highly unlikely that all of this is capital flight.”
In case the outflow is capital flight as an attempt to move a large sum of money out of China, it will create selling pressure in the BTC markets but it is not yet true.