According to Bloomberg, one of the best indicators of measuring the demand for cryptos is that some Chinese investors are shifting from digital assets to the continuously rising domestic stocks market on Monday, October 7th.

Despite China's ban on crypto trading in 2021, many mainland residents continue to use overseas accounts and exchanges to buy and sell digital currencies, partially to avoid capital controls and transfer assets overseas.

Dessislava Aubert, Senior Research Analyst at the blockchain data company Kaiko, stated that since the end of September, the trading price of Tether's stablecoin USDT (the most widely used crypto globally) has sometimes been discounted relative to the US dollar. The appearance of the discount coincided with a series of loosening measures taken by the China's central bank to curb the deteriorating economic outlook, which led to the soaring stock prices.

Stablecoins are a type of cryptocurrency whose value is usually pegged at a 1:1 ratio to assets like the US dollar. They are used for trading and as a hedging tool against the frequent price fluctuations of tokens like bitcoin.

Livio Weng, CEO of the Hong Kong-based crypto exchange Hashkey, stated: "If traders rush to exchange back to fiat currency, it can be inferred that they are panic buying Chinese stocks."

Aubert from Kaiko stated that due to the ban, crypto exchanges do not have USDT/RMB trading pairs, making the US dollar the de facto barometer for measuring activity. Slight discounts indicate an increased demand for the US dollar and an increase in selling of Tether.

Although it is difficult to measure how much selling pressure on USDT from Chinese investors comes from exchanges, the situation on other platforms is clearer. Binance's peer-to-peer market shows off-exchange quotes for USDT in the range of 6.78-6.98 RMB, while the offshore RMB to USD exchange rate on traditional currency markets is 7.07 RMB.

Annabelle Huang, Managing Partner at the Singapore-based digital asset investment firm Amber Group, said: "We can see the connection between this and the onshore A-shares trading demand." She mentioned that some brokerage firms even opened during China's recent Golden Week holiday to "attract new clients."

Cryptocurrency hedge fund MNNC Group's business development and global strategy director Laura Vidiella del Blanco stated that this demand is not only driven by retail investors. Some institutional investors of the company are shifting their allocations towards Chinese stocks.

The Shanghai Composite Index rose by 21% from September 23rd to September 30th (the day before the Chinese stock market holiday shutdown). After trading resumed on Monday, the index rose by another 8%.

Vidiella del Blanco said, 'Most of these are Asian allocators who are familiar with the market and have a variety of strategies besides digital assets.'

Estimates from blockchain intelligence company Chainalysis Inc. show that Chinese over-the-counter brokers have attracted 'unprecedented' inflows of funds this year, indicating strong demand for cryptocurrencies among Chinese investors despite ongoing bans.

'Perhaps this is the first time people hope the National Day holiday can be shorter, which is quite an incredible move,' Amber Huang said.