Chinese Real Estate Investors Expand to Cryptocurrency Market

Real estate investors from one of China's most affluent regions are now turning their attention towards forked cryptocurrencies

A real estate expert, known by his surname of Chen, from the Wenzhou region, established a team of twenty real-estate speculation investors almost a decade ago. The group, consisting mostly of Chen’s close friends’ purchases homes on the same street at a negotiated price and then continued to sell the houses at a profit. According to Chen, an investor would lose his place on the team if they sold the house at a loss. However, due to the Chinese government’s increasingly restrictive policies regarding housing prices, Chen has sold all his houses and turning his attention to the cryptocurrency industry.

While Chen admires Bitcoin, he favors the cryptocurrency’s forks over the highly lucrative main cryptocurrency. According to Chen, Bitcoin is likely to become a capital game exclusive to wealthy bankers and financial experts. Chen continues that while he does not have enough money to make a worthwhile investment in Bitcoin, he notes that as the Bitcoin value increases, so do its forked currencies. Chen became interested in forked coins in August shortly after the Bitcoin Cash fork. After the fork, Chen discovered some Bitcoin Cash in his wallet and has since devoted his time to investing in the forked cryptocurrencies.

After a fork, Bitcoin users usually receive their holding of the forked coin at a ratio of 1:1. However, some coins use different rates such as BCD’s 1:10 or Bitcoin X’s 1:10000. According to Chen, this aspect is likely to attract investors. Initially, a newly forked coin struggles to draw attention, especially as more forks emerge. However, all Bitcoin forks have an advantage over newly created cryptocurrencies, as they already have the relatively large Bitcoin user-base as a starting point.

Chen explained that while forked coins are initially worthless, they eventually start attracting attention as the trading volume increases and the price start growing. In the last three months alone, Chen has already invested in Bitcoin Gold (BTG), Bitcoin Cash (BCH), and Bitcoin Diamond (BCD). When Chen invested in BCH, the trading price was $300, and he sold once the price peaked at $2 800. Currently, Chen is actively searching for the next BCH.

In his search for the next BCH, Chen has created a set of criteria to which a forked coin must be compliant if it is to prove fruitful.

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  • Firstly, Chen looks at the team behind the suggested fork and their capabilities. He considers the team’s expertise as well as developing skills.
  • Secondly, Chen considers the trading price. If the price is already quite high, it is likely that it will not show any significant growth in the future.
  • Thirdly, Chen researchers the user base. He specifically looks at whether the forked coin is listed on enough exchanges worldwide. It is essential, according to Chen, that the coin be available globally to diminish political risks.
  • Lastly, Chen urges that most forked coins require patience from the user, as most forked coins take some time before they start gaining momentum.

Chen has recently started to invite so-called investment whales as well as prominent public figures to join his investment initiative. Chen considers his investment squad to be similar to a small venture capital fund. Chen stated that if a forked coin has enough resources and is open to small investments, he would likely participate in the market.

Currently, Chen’s investment portfolio consists of 10% ICO tokens, 10% BTC, and 40-50% of forked coins. According to Chen, he believes in investing in the unknown, because this is the area that offers the most opportunity for growth.

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