Chinese state media outlets have issued warnings to citizens regarding the risks associated with cryptocurrency investing, despite China’s explicit prohibition of crypto trading. The renewed interest in Bitcoin within the country followed a surge in its price to levels not seen since 2021.
Bitcoin surpassed the $64,000 mark, reaching its highest value since the 2021 bull run when it peaked at $69,000. This recent rally in Bitcoin’s price sparked increased activity in the overall altcoin market and reignited interest in crypto trading, even from an unexpected source: China. State-owned media felt compelled to advise Chinese crypto investors, despite the nation’s comprehensive ban on crypto trading and mining.
Bitcoin’s Recent Surge: Bitcoin’s price surged to over $64,000, fueled by anticipation surrounding the next Bitcoin halving event and the SEC’s approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January. This surge in the world’s leading cryptocurrency prompted renewed interest from various quarters, including China, which had explicitly prohibited all crypto trading and mining activities in 2021.
Despite the ban, Chinese state-owned media outlets published articles cautioning investors about the risks associated with Bitcoin and crypto trading.
According to reports from the South China Morning Post, the state-owned Economic Daily newspaper emphasized the risks of investing in digital assets, emphasizing that the recent increase in Bitcoin’s price could not mask the inherent risks associated with the cryptocurrency. The article highlighted the volatile nature of Bitcoin’s value and emphasized that cryptocurrencies have yet to achieve mainstream acceptance. Investors were warned to maintain a clear and rational mindset in light of the strict regulatory oversight in the industry.
The article reiterated that while the US had allowed the listing of spot BTC ETFs, China continued to enforce a blanket ban on crypto trading and mining. Citing Beijing-based lawyer Xiao Sa, the article explained that the sweeping ban prohibited foreign Bitcoin ETF dealers from selling relevant financial products to Chinese residents and forbade investors in mainland China from directly purchasing such products.
Chinese Investors Turn to Bitcoin Amid Sluggish Local Stock Market: Bitcoin remains an attractive option for Chinese investors as the country’s stock market continues to experience a downturn amidst slowing economic growth. According to Reuters, clandestine Bitcoin trades have increased in China as the stock market has languished over the past three years. Dylan Run, a finance sector executive in Shanghai, shifted some of his assets into crypto in early 2023 after noticing the slowdown in the Chinese economy and stock market.
Run likened Bitcoin to a safe haven, akin to gold, stating that it now constitutes half of his portfolio, valued at around one million yuan. He noted that his crypto investments had appreciated by 45%, while China’s stock market had declined for three consecutive years. Reuters reported that more Chinese investors like Run are exploring alternative avenues to acquire Bitcoin and other assets, believing them to be safer than investing in China’s struggling stock and property markets.
