Despite the Chinese government’s stringent ban on cryptocurrency-related activities, the surging price of Bitcoin has captured the attention of internet users across mainland China. The world’s leading cryptocurrency saw an impressive increase of more than 18% over the past five days, crossing the US$63,000 mark and becoming a hot topic on major Chinese social media platforms.
Unwavering Interest Amid Regulatory Clampdown
Bitcoin’s popularity soared, ranking as the 11th most-searched term on Weibo, China’s microblogging service, at one point. Furthermore, its traction on the Chinese super app WeChat surged by more than 358% in just a day, as per the official WeChat Index by Tencent Holdings. This index monitors keyword trends across various in-app activities, highlighting the growing fascination with Bitcoin’s price movements among the Chinese public.
Historical Context of Cryptocurrency in China
China’s relationship with cryptocurrency has been fraught with restrictions. In 2013, the government prohibited banks from dealing with Bitcoin, and in 2017, it forced domestic cryptocurrency exchanges offshore. The regulatory stance hardened in 2021, with a reiteration of the ban on financial institutions engaging in any crypto-related transactions.
The resurgence of interest in Bitcoin coincides with its significant price rally, marking a 40% increase since the beginning of February after a prolonged period of low activity in the crypto market throughout the previous year. This rally was fueled, in part, by the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States, propelling Bitcoin to its highest trading levels since the record high of US$69,000 in November 2021.
Cryptocurrency Enthusiasm Persists
Despite the government’s ban, a vibrant community of cryptocurrency enthusiasts continues to thrive in mainland China. The allure of investing in cryptocurrencies has grown, especially as the country’s stock market faces challenges amidst economic downturns. Traders have found workarounds to circumvent the loosely implemented restrictions, with major exchanges like Binance subtly facilitating account creation and trading for mainland users.
The Chinese government maintains a vigilant stance on cryptocurrency, emphasizing the financial stability risks associated with crypto activities. While intensifying efforts to mitigate money laundering risks tied to cryptocurrencies, China supports Hong Kong’s ambitions to become a major hub for virtual assets.
Cryptocurrency Adoption and Trading in China
According to Chainalysis, mainland China ranked 11th in cryptocurrency adoption among 20 major countries last year, with a notable presence in both centralized exchange trading and peer-to-peer volume. This ongoing engagement reflects the enduring interest and innovative approaches of Chinese traders in navigating the complex landscape of cryptocurrency trading, despite regulatory hurdles.
