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Blockchain
TechPolicy

Chinese state media warns against cryptocurrency trading, as domestic interest surge on bitcoin rally

  • Wild fluctuations in bitcoin’s value remain the norm, and cryptocurrencies have yet to enter the mainstream, the Economic Daily says
  • The next bitcoin halving event in April and the launch of spot bitcoin ETFs in the US have fuelled the jump in value

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The price of bitcoin reached US$63,000 on Wednesday for the first time since the peak of the last bull market in November 2021. Photo: Getty Images via AFP
Xinmei Shen

Bitcoin’s recent rally has sparked renewed warnings from Chinese state media about the risks of investing in cryptocurrencies, as interest around digital assets remains strong in the country despite a sweeping ban on crypto mining and trading.

A rebound in bitcoin prices cannot “hide” the underlying risks of the digital asset, state-owned newspaper Economic Daily said on Sunday.

Wild fluctuations in bitcoin value remain the norm, and cryptocurrencies have yet to enter the mainstream, the article said, adding that regulatory scrutiny of the market remains tight. Investors should maintain a “clear and rational” mindset, it said.

The caution comes after the world’s largest and most valuable cryptocurrency gained nearly 45 per cent in February, reaching its highest level since November 2021.

The advance was fuelled by the launch of spot bitcoin exchange-traded funds in the United States in January, as well as bitcoin’s next “halving” event expected in April, which will cut the reward for mining new bitcoin by half and slow its release into the market.

The combination of factors sent bitcoin’s value to over US$62,500 last Wednesday. And despite a mild drop since then, the cryptocurrency is still trading at 40 per cent higher than the beginning of the year.

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