State-Controlled Chinese Media Issues Alert on Cryptocurrency Investments Amid Rising Domestic Enthusiasm for Bitcoin Surge

The surge in Bitcoin’s value has prompted fresh cautions from China’s state-run press, emphasizing the hazards of cryptocurrency investment. This comes even as Chinese enthusiasm for digital coins persists, undeterred by the country’s comprehensive prohibition on cryptocurrency mining and transactions.

The Economic Daily, a government newspaper, pointed out on Sunday that the recent Bitcoin price recovery does not mask the risks associated with the digital currency.

The volatility of Bitcoin’s price is par for the course, with cryptocurrencies still on the fringe of mainstream finance, the publication mentioned. It also highlighted the continued strict regulatory oversight over this market sector and advised investors to remain “clear-headed and logical.”

The note of caution follows the steep ascent of Bitcoin, which soared close to 45 percent in February, marking a price point not seen since November 2021.

Driven by several factors, the cryptocurrency’s value exceeded US$62,500 last Wednesday. Even after a slight decline, Bitcoin continues to be valued roughly 40 percent more than it was at the year’s start.

The steep increase in Bitcoin’s price has triggered a spike in interest among netizens in mainland China, sustaining a vibrant community of crypto aficionados within the nation, despite official policies against it.

Bitcoin searches surged last week across several Chinese online platforms, including the blogging platform Weibo and the versatile app WeChat, with the term’s search frequency multiplying.

In the face of China’s economic slowdown and a bearish stock market, there appears to be a trend toward clandestine Bitcoin trading in the country, as suggested by a January Reuters report.

Bitcoin captures Chinese social media’s attention amid soaring value

The Chinese state media has been consistently discouraging the population from participating in cryptocurrency ventures, pointing to potential capital outflows and the danger of financial instability.

In September 2021, ten Chinese government agencies intensified the clampdown on digital currencies by collectively classifying many crypto-related activities as illegal financial operations.

Also, in the same period, leaders of the Blockchain-based Service Network, a state-endorsed Chinese project advocating for blockchain technology’s commercial use, labeled cryptocurrencies as “history’s most significant Ponzi scheme.”