Chinese State Media Warns against Crypto Trading Despite Ban
Chinese state media agencies have cautioned citizens about the risks of cryptocurrency investing, even though China has explicitly banned crypto trading. This warning comes as Bitcoin, the leading cryptocurrency by market cap, reached its highest price since 2021. Despite the ban, China has seen a renewed interest in crypto trading.
Bitcoin Surges to New Heights
Bitcoin recently surpassed the $64,000 mark, reaching its highest price since the 2021 bull run when it reached $69,000. This surge in Bitcoin’s price has sparked renewed interest in the crypto market, including in China, where crypto trading and mining are banned.
The surge in Bitcoin’s price can be attributed to several factors, including:
- The anticipation of the next Bitcoin halving event
- The SEC’s approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January
Despite the ban on crypto trading in China, state-owned media has published an article warning investors about the risks associated with Bitcoin and crypto trading.
Chinese State Media Highlights Risks of Crypto Investing
The South China Morning Post reports that the state-owned newspaper “Economic Daily” and “Jingji Ribao” have emphasized the risks of digital asset investing, stating that the rebound in Bitcoin’s price does not negate the underlying risk of the cryptocurrency. The article explains that Bitcoin’s value is known for its wild fluctuations and that cryptocurrencies have not yet become mainstream. It advises investors to maintain a clear and rational mindset and warns of strict regulatory scrutiny in the industry.
In addition, the article points out that while the US allows the listing of spot Bitcoin ETFs, China continues to enforce a blanket ban on crypto trading and mining. This means that foreign Bitcoin ETF dealers are prohibited from selling relevant financial products to Chinese residents, and investors in mainland China are forbidden from directly buying such products.
Chinese Investors Turn to Bitcoin amid Stock Market Slump
Chinese investors have shown interest in Bitcoin as the country’s stock market experiences a continued slump. Reuters reports that secret Bitcoin trades have grown in China, with investors viewing Bitcoin as a safe haven during economic slowdowns.
For example, Dylan Run, a Shanghai-based finance sector executive, started investing in crypto in early 2023 after realizing the Chinese economy and stock market were slowing down. Run believes that Bitcoin is a safe haven, similar to gold, and he now owns around one million yuan worth of crypto, which makes up half of his portfolio. While China’s stock market has declined for three years, Run’s crypto investments have increased by 45%.
According to Reuters, more Chinese investors are turning to creative ways to acquire Bitcoin and other assets, seeing them as safer investments compared to China’s dwindling stock and property market.
As of now, Bitcoin is trading at $65,036.89.
Hot Take: Chinese State Media Issues Warning, but Interest in Bitcoin Persists
Despite the warning from Chinese state media about the risks of crypto trading, the renewed interest in Bitcoin suggests that many Chinese investors are willing to take the chance. This is driven by factors such as the recent surge in Bitcoin’s price, the anticipation of the next halving event, and the belief that Bitcoin is a safe haven during economic downturns.
While China’s ban on crypto trading remains in place, investors are finding ways to acquire crypto assets and are diversifying their portfolios beyond the struggling stock and property markets. The increased interest in Bitcoin within China indicates that the ban has not curbed enthusiasm for crypto trading and suggests that the ban may be more difficult to enforce in practice.
As the Chinese crypto market continues to evolve, it remains to be seen how the government will respond to the persistent interest in Bitcoin and whether there will be any changes to the current ban on crypto trading.
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