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Chinese State Media Warn Of Risks Of Cryptocurrencies Amid Bitcoin Rally

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Chinese State Media Warn Of Risks Of Cryptocurrencies Amid Bitcoin Rally

Chinese state media are warning investors against investing in cryptocurrency amid the Bitcoin rally. The state-run Economic Daily noted on Sunday that investors should remain cautious about the risks associated with bitcoin and products whose value is tied to cryptocurrencies. The newspaper quoted Beijing-based lawyer Xiao Sa, who noted the recent approval of spot Bitcoin ETFs in the United States. The approval has lowered the entry barrier for foreign investors and increased trading activity in the market, he said.

He also emphasized that foreign Bitcoin ETF intermediaries cannot sell related financial products to Chinese citizens. In addition, residents of Mainland China are prohibited from directly purchasing relevant financial products using the instruments. The article also quoted Zhao Wei, a senior researcher at OKX, who highlighted other problems in the cryptocurrency market. These include increasing macroeconomic uncertainty, the presence of unforeseen industry events and unclear regulatory policies.

In September 2021, the Chinese government took a significant step to ban cryptocurrencies, involving 10 different agencies. They have declared various cryptocurrency-related activities illegal, classifying them as illegal financial activities. The move was aimed at restricting the use and trading of cryptocurrencies within the country. While the government has cracked down on these activities within the country, it has not outright banned individuals from possessing digital assets like Bitcoin or Ethereum.

Image: CryptoRank