It’s no secret that Chinese investors have turned to overseas real estate in times of economic sanctions and government crackdowns. In fact, overseas real estate is the mainstay of any wealthy Chinese investors portfolio. This makes the fact that China’s new wave of crypto millionaires are investing in overseas property unsurprising. With Chinese regulators cracking down on crypto exchanges and bumping up taxes, it is time for the super wealthy crypto investors to start finding ways to mitigate risk of losing their entire portfolio.
A New Way to Get Money Out of China
For a long time, Chinese investors have had to buy overseas property via Hong Kong, as the taxation rules for Chinese citizens are rather friendly. Thanks to cryptocurrencies, freshly minted millionaires – and all other types of investors for that matter – can sell their Bitcoin in the USA or buy property directly with Bitcoin. Crypto provides a unique window of opportunity to help move money out of China into the developed world. The Chinese real estate market is growing exponentially and property isn’t good value for money, hence why so many investors are taking their money out of the country.
Causing Trouble for Locals
This has long been the core issue with Chinese investors diversifying their portfolios with overseas real estate. They often pay in cash – or now in Bitcoin – and homeowners prefer deals of this nature, rather than selling their home to someone who is using bank-backed funds. This leads to an inflated property market whereby locals cannot afford to get on the property ladder and are losing out on deals – even if they have the highest bid – simply because they can’t pay in cash or crypto.
Chinese Regulators Getting Tough
The Chinese government is utilizing the “Great Firewall of China” to block overseas crypto exchanges in a bid to crack down on the crypto market. In addition to this, it also banned all ICOs and has outlined proposals to discourage people from mining cryptos. Despite Chinese companies – such as Bitmain – controlling most of the Bitcoin network hash rate, the government is still adamant about ending the crypto revolution. There are some people in the crypto world even suggest Bitcoin is controlled by China, but the government has opposite intentions. While the government has given no official reason as to why they are taking a tough stance on the crypto world, its mantra for the past few years has been “cleansing risk from financial markets”.
Despite the crypto bans in China, the Chinese crypto world is exploding with activity and is growing rapidly. Determined investors are finding new ways every day to bypass the great firewall and get their hands on crypto. Foreign real estate is a great way for concerned investors to diversify their portfolio, but it’s a behavioral habit that causes issues for the locals in that country. Perhaps it’s time for the Chinese government to take a leaf from Malta’s book and pass three new crypto-friendly bills into law.