Despite China’s attempt to crack down on Bitcoin, Chinese investors are still buying ICOs and Bitcoin. Chinas initial move to ban ICOs and exchanges, was met with defiance as investors continue to look for ways of safely move money out of country through Bitcoin and other cryptocurrencies. With the incredible gains Bitcoin has seen over the past two years, it’s not a big surprise that investors are not easily dissuaded and often see the rewards outweighing the risks.

Stating that Bitcoin lacks a legal foundation, China moved to shut down Bitcoin exchanges including BTCC, ViaBTC, Yunbi, OKCoin, and Huobi and reportedly ordered them to stop trading by September. Despite the closures, many have looked to Japanese exchanges, and app based peer to peer sales to purchase Bitcoin. The closure of these exchanges, one would have thought, would have sent Bitcoin into a tailspin as China represents over 10% of Bitcoin trading activity but the veracious appetite for Bitcoin is one that has been proven hard to stop. The price shortly fell from $5000 to $3000 on the news but was short lived as the markets have obviously rebounded and rallied unlike anyone could have expected.

Over the past few years, China has worked hard to crack down on money laundering and fraud, and sees Bitcoin as a way for these crimes to continue. The government is also concerned with the affects Bitcoin will have on the Chinese markets and fears that speculation will cause a financial crash similar to the stock market crash of 2015. The rapid development of shadow banking most recently has created a difficult time for regulators that are targeting unproven business practices and trying to avoid major financial losses for investors caught in the mix. Their eyes are clearly set on making sure this does not happen with Bitcoin.

ICO’s are also still being marketed to Chinese investors who tend to take greater risks then Western investors. They are being purchased using Bitcoin on foreign platforms. China’s futile attempts to kill Bitcoin and ICO’s have had very little overall effect on Bitcoin and investors waiting to cash in on the cryptocurrency market. The best solution for China might be regulating both Bitcoin and ICO’s so that they could have more control over how the assets are sold. Simply banning them and starving a market that clearly has a huge appetite will just send investors to places that will sell them what they want. Sometimes if you make something illegal it just makes the population want it even more, drives up the price, and does nothing to correct the problem. In fact China’s regulations might be having the exact opposite effect intended.