Bitcoin remains fast-trending topic on Chinese social media as cryptocurrency’s surging price overcomes stigma of government ban

Bitcoin on Wednesday ranked as the 11th most-searched term on microblogging service Weibo
On super app WeChat, bitcoin’s popularity increased more than 358 per cent from a day ago

Bitcoin

Xinmei Shen

Published: 7:00am, 29 Feb 2024

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The surging price of bitcoin has sparked increased attention from internet users in mainland China, where some cryptocurrency-related activities persist in spite of a sweeping government ban.

The world’s largest and most valuable cryptocurrency, bitcoin gained more than 16 per cent over the past five days to surpass US$59,000 on Wednesday, which made it a fast-trending topic on all major Chinese social media platforms.

At one point on Wednesday, bitcoin ranked as the 11th most-searched term on microblogging service Weibo.

Bitcoin’s popularity also increased more than 358 per cent from a day ago on Chinese super app WeChat, according to Tencent Holdings’ official WeChat Index, which tracks keyword traction across in-app search, videos, live streams and blog posts.

The Chinese government banned banks from handling bitcoin in 2013 and forced cryptocurrency exchanges to move offshore in 2017. In 2021, the country’s regulators reiterated the prohibition on all financial institutions from engaging in crypto-related activities. Photo: Shutterstock

That followed a 676 per cent jump in bitcoin’s popularity on WeChat on February 13, the same day bitcoin reached the US$50,000 mark for the first time in more than two years.

Bitcoin has climbed 40 per cent since the beginning of February after staying below US$30,000 for the most part of last year, following a crypto market rout in 2022.

Fuelled by the launch of spot bitcoin exchange-traded funds in the United States in January, bitcoin is now trading at its highest level since reaching a historic high of US$69,000 in November 2021.

The strong interest in Chinese social media of bitcoin prices’ ascent reflects how a community of cryptocurrency enthusiasts on the mainland continues to thrive, despite Beijing’s rigid stance against all crypto-related activities.

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Investing in cryptocurrencies has recently become more attractive to some people on the mainland, as the country’s stock market continues to plummet amid its economic woes, according to a Reuters report in January.

Cryptocurrency trading via a number of major exchanges has also remained active in mainland China, as traders employ a range of workarounds to skirt loosely implemented restrictions.

Despite warnings on its site, Binance allows mainland users to create accounts and trade on the exchange via some workarounds, according to tests conducted by the South China Morning Post.

Still, the Chinese government has ramped up its scrutiny of all activities related to cryptocurrencies over the years, citing risks to financial stability.

China’s back-door crypto traders look more important than ever to Binance’s future

Beijing is now tackling money laundering risks associated with cryptocurrencies, even though it endorses Hong Kong’s ambitions to become a major hub for virtual assets.

In research firm Chainalysis’ ranking of cryptocurrency adoption in 20 major countries, mainland China took the No 11 spot last year after placing tenth in 2022.

While mainland China’s ranking in terms of trading volume on centralised crypto exchanges dropped to the No 10 spot last year after placing second in 2022, Chainalysis said the country ranked 13th in peer-to-peer trading volume last year, up from No 144 in 2022.

Before cryptocurrency exchange FTX collapsed in 2022, mainland Chinese traders made up 8 per cent of the platform’s user base, according to the company’s bankruptcy filings.