Published
1 month ago on
March 04, 2024
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Chinese state media agencies have warned citizens about the risk of cryptocurrency investing despite China’s explicit ban on crypto trading. Renewed domestic interest in Bitcoin came after the world’s leading crypto by market cap reached its highest price since 2021.
Bitcoin passed the $64,000 mark, its highest since the 2021 bull run, which saw the digital gold token reach $69,000. $BTC’s rally sparked a surge in the overall alt market last week and inspired renewed crypto trading interest from an unlikely source: China. State-owned media was forced to caution Chinese crypto investors despite the country’s complete ban on crypto trading.
Bitcoin Making Waves
$BTC surged to over $64,000, the highest it has been since its 2021 all-time high of $69,000, amid the anticipation of the next Bitcoin halving event, and the SEC’s approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January. The surge in the world’s largest crypto by market cap sparked renewed interest from multiple sources, including China, which explicitly banned all crypto trading and mining activities in 2021.
Despite the blanket ban, Chinese state-owned media published an article warning investors against the risks of $BTC and crypto trading.
According to reports from the South China Morning Post, the state-owned newspaper Economic Daily, or Jingji Ribao, highlighted the risks of digital-asset investing and said a rebound in $BTC price could not “hide” the underlying risk of the cryptocurrency. The report explained that wild fluctuations in Bitcoin’s value remain the norm, and cryptocurrencies have not yet become mainstream. The article warned investors that regulatory scrutiny of the industry remains strict and that investors should maintain a “clear and rational” mindset.
The article reiterated that while the US allowed the listing of spot BTC ETFs, China continues to enforce a blanket ban on crypto trading and mining. According to reports by The Block, the article cited Beijing-based lawyer Xiao Sa, who said the sweeping ban means foreign bitcoin ETF dealers are prohibited from selling relevant financial products to Chinese residents, further stating investors in mainland China are also forbidden from directly buying such products.
Chinese Investors Turn to Bitcoin as Local Stock Market Remains in a Slump
Bitcoin remains of interest to Chinese investors as the country’s stock market experiences a continued slump as the economy slows down. Reuters reports that secret Bitcoin trades have grown in China as the stock market has slowed down over the past three years. Reuters recounts the experience of Dylan Run, a Shanghai-based finance sector executive who started moving some of his money into crypto in early 2023 after realizing the Chinese economy and stock market were slowing down.
Run said, “Bitcoin is a safe haven, like gold,” stating he now owns around one million yuan worth of crypto, making up half of his portfolio. The Shanghai finance executive added his crypto investments have increased by 45% while China’s stock market has declined for three years. According to Reuters, like Run, more Chinese investors are using new creative ways to acquire Bitcoin and other assets, which they believe are safer than investing in China’s dwindling stock and property market.
At the time of writing, $BTC traded hands at $65,036.89.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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