‘I’m talking about China.’ As the ‘Chinese coins’ crypto narrative heats up, here are five tokens to watch
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Crypto altcoins Filecoin, Conflux, NEO, VeChain and Phoenix Chain, among several others, have been pumping just lately. Because… well, China. (And Hong Kong.)
“China, China, China… China now, China… I have to have my China. I go to China. Don’t tell me about China, I know China. China all the time.” Donald Trump was onto something – just not Chinese crypto coins.
So then, at the risk of looking like we’re flagrantly jumping on the very latest crypto narrative bandwagon, which, let’s face it, we absolutely are with this article, let’s talk about some “HOT Chinese coins”…
…ahem, with the very necessary caveat that this has been a hard-pumping trend just lately, which has the potential to wane or absolutely dump. Buy tickets to the unsupervised and volatile ride at your own risk.
If you haven’t, however, caught some of our recent articles explaining some of the reasoning behind this particular crypto-sub-sector surge or resurgence, though, then let’s just dig into that briefly first.
When we recently put together our list of crypto “narratives” to watch Chinese coins definitely wasn’t on them. In hindsight, we probably shoulda seen it coming.
And that’s because China’s economy has been in the early stages of reopening to the world since late last year after the nation’s long, brutal “zero Covid” pandemic policy.
Although, to be fair, crypto mining, trading and usage is still very much banned for citizens of the eastern superpower. (Those already holding crypto, however – that’s, begrudgingly, okay.) So, for that reason alone, it’s been easy enough to let Chinese-based crypto projects be pushed well into a dusty corner in the back of the mind’s attic.
But guess what? It turns out the US isn’t the only global financial superpower in town who can moonshot AND shakedown the markets.
And whatever murky thoughts you might have about China and how it goes about its business, from a purely self-centred pump-all-crypto-bags perspective, it feels slightly refreshing to focus on some other kind of financial dictatorship than the US Federal Reserve. Even if for a little while, before the whole trend likely crashes down at some point, like a house of… mahjong.
As the Crypto Twitter account “tedtalksmacro” noted in a now-widely spread and quoted thread, China’s central bank, the PBoC, “injected $92bn USD into the market on Friday”, which he notes “easily outpaces” the US Fed’s current quantitative easing efforts.
And as Bloomberg reports, it’s China’s single-largest-ever liquidity injection into its economy – the second-largest in the world, and currently pacing 2.2% faster than the US.
The Chinese central bank injected $92bn USD into the market on Friday!
This easily outpaces the Fed’s current QT. pic.twitter.com/u3KicIcwv0
— tedtalksmacro (@tedtalksmacro) February 19, 2023
3/ While most analysts are focused on how the Fed tightening will reprice risk assets this cycle, they're failing to consider the scale of easing in the east.
Japan (4th largest CB) + China are injecting liquidity into global markets, easily outpacing the Fed tightening efforts. pic.twitter.com/Q3Qlq3f4Vi
— tedtalksmacro (@tedtalksmacro) February 19, 2023
There are some influential American crypto “leaders”, too, who seem more than happy to switch to the “global liquidity” thesis when it comes to the crypto market. Co-founder of Gemini exchange and custody outfit Cameron Winklevoss, for example, who believes the next crypto bull run will begin in the East.
Any government that doesn't offer clear rules and sincere guidance will be left in the dust. Quickly. This will mean missing out on the greatest period of growth since the rise of the commercial Internet.
— Cameron Winklevoss (@cameron) February 19, 2023
And Brian Armstrong – the CEO of America’s biggest crypto exchange, Coinbase, who, a few days ago, flagged Hong Kong’s apparent move to embrace crypto trading, which we covered briefly in our Mooners and Shakers morning round-up.
America risks losing it's status as a financial hub long term, with no clear regs on crypto, and a hostile environment from regulators.
Congress should act soon to pass clear legislation. Crypto is open to everyone in the world and others are leading. The EU, the UK, and now HK. https://t.co/i9WeUZ7K6H
— Brian Armstrong (@brian_armstrong) February 16, 2023
Meanwhile, here’s another perspective, from crypto trader Andrew Kang, who is suggesting that all the regulatory FUD (fear, uncertainty and doubt) coming from the US is creating short-selling in the market, which is then being “squeezed”, prompting traders to buy more as the market rallies higher.
The China coin narrative has flipped regulatory FUD on its head
The more actions US takes against crypto, the more the narrative is reinforced and induces more shorts to enter the market that need to buy back higher
— Andrew Kang (@Rewkang) February 19, 2023
So, that’s about the size of it, although there might be all sorts of crypto-whale action, behind the scenes pulling a few strings we’re unaware of, too. And that’s now our mixed-metaphor daily quota hit.
Without further ado, let’s briefly examine a handful of coins possibly worth a look. And we’re only identifying ones here that at least have some of their own narrative going on and that we believe have some relatively solid backing and fundamentals.
The largest market-cap crypto on this list, Filecoin describes itself on it’s website as “a decentralised data storage marketplace, protocol, and cryptocurrency”.
It’s built by Protocol Labs, which is actually a San Francisco-based company, but the token and project has historically been pitched to the Chinese market. Like Bitcoin, it’s a “Proof of Work” coin, which means it employs a consensus and rewards mechanism based around “mining” the coin. Most of those early Filecoin miners were based in China and thus the token is considered a “Chinese coin” in some respects.
In March, Filecoin will be introducing smart-contract capability when it launches its FVM (Filecoin Virtual Machine).
Chinese coin narrative? Sure, why not. but Filecoin fans believe the FVM launch is the bigger story here, as it will also enable a token-burning mechanism that could potentially see FIL become a deflationary asset, a bit like Ethereum.
The #FVM is almost here and will shake up the industry like never before. ☄️
Get ready for everything FVM unlocks with smart contracts and provable storage. And join us for the biggest community event of the year on March 1st. ⤵️ https://t.co/zviY8FZwCx pic.twitter.com/MCYC5CGoA6
— Filecoin (@Filecoin) February 13, 2023
At the time of writing, the FIL token is up more than 70% over the past week and month.
We’ve highlighted this one recently in Mooners and Shakers. It’s getting some traction because it’s reportedly China’s only public, regulatory-compliant blockchain and has been able to form some pretty eye-catching partnerships of late, including China Telecom.
China Telecom, 2nd largest wireless carrier in China 🇨🇳 (390+ million mobile subscribers), has partnered with Conflux to develop Blockchain-enabled SIM cards – BSIM! pic.twitter.com/LQxz34L432
— Conflux Network Official (@Conflux_Network) February 15, 2023
Conflux is a layer 1 chain, that uses a hybrid proof-of-work and proof-of-stake mechanism. It also pitches itself as a bridge between East and West, which really just means that it’s a protocol that allows users to swap assets across multiple blockchain networks.
In other words, it’s a Layer 1 blockchain interoperability play.
At the time of writing, the CFX token is up more than 546% over the past week and 1,136% over the past month.
There are others, of course, and you don’t have to look too far on Crypto Twitter to find them, but here are three more potentials we feel okay about highlighting. Even still, best to be careful tossing any of your hard-earned (that you can afford to lose) at them, as it wouldn’t surprise us one bit if the market turns south any minute.
NEO (NEO): Any crypto speculator who was around in the bull run of 2017 and crash of 2018 will remember NEO. In fact, this crypto writer managed to buy it when it was called AntShares and then not sell at the top of its stupendously epic run in late 2017.
That’s another story best told wistfully gazing into a beer. But the Chinese-founded and based NEO is not dead. In fact, it’s been a top 100 mainstay all this time. And look, if the bull market is to come back in any force either later this year (or more likely 2024), and the Hong Kong/China narrative somehow lasts, then NEO has half a chance to pick up where it left off – as the “Chinese Ethereum”.
At the time of writing, NEO is up 81% over the past week.
VeChain (VET): This another popular, not-dead-yet project from “the previous cycle”, and another obvious pick for those who’ve been watching the space for a while.
With Chinese origins and a Chinese team, VeChain forged a reputation as one of the leading blockchain projects in the game of enhancing supply-chain management. Doesn’t sound sexy, but that’s a frothy crypto trend/use case of yore, and could be again. Like NEO, VeChain enables holders to earn a separate token within its ecosystem as regular passive rewards.
At the time of writing, VET is up 35% over the past seven days.
Phoenix appears to be one of those do-absolutely-everything projects, but essentially, it’s a layer 1, Ethereum-compatible blockchain that empowers enterprises to build dApps (decentralised applications) that are AI-based and private for users.
By the looks of its website, it also has a in-built layer 2 scaling and oracle (like Chainlink) capabilities, as well as its upcoming AlphaNet AI-driven trading-tool platform.
The Wuhan-based project has some notable partners and backers, too, including: Binance, Tencent Cloud, #Hashed and NEO, among others.
At the time of writing, PHB is up 62% over the past week.