After bitcoin hit a two-year high near the $64,000 level on Monday, Chinese state media once again warned investors against investing in cryptocurrencies.
On Sunday, the state-run Economic Daily newspaper believes that the rise in Bitcoin’s price did not hide the major risks associated with the cryptocurrency. It said investors should be cautious about the risks associated with Bitcoin and products whose value is tied to cryptocurrencies.
The newspaper quoted Beijing-based lawyer Xiao Sa, who mentioned the recent approval of Bitcoin ETFs in the United States. He claims that the approval has sped up trading and made it easier for foreign investors to enter. He went on to say that foreign Bitcoin ETF dealers are not allowed to sell financial products related to China.
The article also quoted Zhao Weia, a senior OKX researcher, who pointed out other issues concerning the cryptocurrency market. These include unclear regulatory policies, growing macroeconomic uncertainty and unpredictable events in the industry.
China’s continued concerns about cryptocurrencies.
The warning comes after a 20 percent rise in the price of bitcoin this year. Most of this increase has taken place over the past few weeks, as a result of a significant influx in the number of bitcoin funds listed in the United States. On many Chinese online platforms, such as Weibo, bitcoin has become a hot topic.
China ‘s state media constantly warn against involvement in cryptocurrencies, citing concerns about financial instability and capital flight.
In September 2021, the Chinese government set up ten different agencies to significantly ban cryptocurrencies. They deemed certain cryptocurrency practices illegal and declared them illegal financial activities. The change was aimed at restricting the trading and use of cryptocurrencies in the country.
Although the government supervised the activity, it did not ban anyone from owning digital assets such as Bitcoin or Ethereum.
Binance’s success in China despite cryptocurrency bans.
Beijing has already taken a number of actions against digital currencies, including the latter. China shut down its domestic cryptocurrency exchanges in 2017, ending a speculative market that controlled about 90% of bitcoin trading worldwide.
Last year, China paradoxically became the largest market for cryptocurrency exchange Binance, despite the ban on cryptocurrency trading.
Reports indicate that users engaged in about $90 billion worth of cryptocurrency trading in a single month in 2023, accounting for about 20% of Binance’s total global trading volume. At this point, it is estimated that there were more than 900,000 active Binance users in China .
