Recent data has revealed that the number of new blockchain and crypto start-ups in China is still growing at a decent pace despite fewer new companies formed throughout 2019.
The data, released by blockchain research firm LongHash, has revealed that 714 new distributed ledger technology companies have emerged during January alone.
Although there are over 79,000 blockchain companies registered throughout China, only 26,089 are considered as operating. Likewise, some companies could be shell corporations established in China but managed out of other jurisdictions.
The data also shows that 57,257 blockchain companies have had their licences revoked or their legal status changed in China since 2009 – a stark warning of the dangers of starting up a business in a bleeding-edge industry.
In 2018, alongside the ICO craze, over 19,000 blockchain companies launched in China compared to just 8,600 the previous year.
This figure dropped during 2019 to just 14,000 start-ups, coinciding with the tail end of a prolonged bear market.
Nevertheless, overall the data shows that despite some uncertainty in the Chinese blockchain industry, appetite for the technology is still strong, with the number of new blockchain start-ups per month still matching 2017 levels.
Guangdong province, home to major tech hub Shenzhen on the border with Hong Kong, has attracted the most blockchain companies, with a huge 22,636 firms choosing the province as their base of operations – more than double that of any other province.
‘Blockchain, not Bitcoin’
While China has attracted a huge amount of cryptocurrency companies, the Chinese government has been quick to dismiss the usefulness of cryptocurrencies such as Bitcoin.
In November 2019, Chinese President Xi Jinping said that blockchain technology adoption did not go hand in hand with “speculation in virtual currency”.
Xi Jinping also reiterated his stance on blockchain technology, calling for a “blockchain, not Bitcoin” approach to the growing industry.
As a result of China’s appetite for blockchain technology, prominent cryptocurrency firms have indicated they will increase their presence in the country.
In October 2019, Binance said it would be “scaling up” its capacity for Chinese customers following Xi Jinping’s statements, which prompted individual web searches for ‘blockchain’ in China to spike to over 9 million.
You can read more about China’s blockchain industry here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.