China’s Deposits Dropped 1.32 Trillion Yuan as Some of the Money Goes to Cryptocurrency Markets

According the latest data posted by the central bank of China, the outstanding deposits dropped by 1.32 trillion yuan in April. It was also remarked as the largest decline in history within a single month.

At the end of December 2017, the Outstanding RMB deposits registered RMB 164.1 trillion, including 64 trillion yuan from household deposits and 57 trillion yuan from non-financial institutions. The deposit from Chinese citizen and domestic enterprises account for 74% of the total bank RMB deposits.

Although the outstanding RMB deposits has a year-on-year growth of 8.7% , the growth rate has dropped 1.6 percent compares with the same period last year. At present, the year-on-year growth rate of deposit among financial institutions has dropped to the lowest point since 1979.

At present, the household deposits is experience a sharp fall, the new deposits amounted to 535.2 billion yuan. The financial products and future goods divert the deposits, currently, the ordinary deposit is still under pressures. The monetary austerity lowered the liquidity of financial institutions which has a significant effect on outstanding deposits.

It was reported that, there are 26 fund raising activities took place in April and 10 of them targeted startups in blockchain industry, including cryptocurrency exchanges, investment analysis platforms and digital wallets, with a total amount of 19.27 billion yuan.

Some insiders speculate that the price of bitcoin and other cryptocurrencies rebounded in April, in the meantime, a lot of capital investors start their blockchain layout, which draws attention from the capital market. It was also predicted that a significant amount of money has entered the cryptocurrency market.

In this regard, some experts argues that:

“Bitcoin and other digital currencies have little effect on deposits as a whole and it cannot be a major factor in China’s capital market at present.”

However, many insiders are very bullish on this market and they believe that when financial institutions lose some of their deposits, people are more likely to seek other investment options, which may bring opportunities to the blockchain and cryptocurrency markets.

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