Bitcoin plunges after China doubles down on crypto ban

ISTANBUL

The People’s Bank of China (PBoC), the country's central bank, has reiterated its decision that digital asset activities are illegal in China, doubling down on its crypto ban, which led the crypto market to fall and Bitcoin to lose 5% in the last 24 hours.

The PBoC cited risks associated with crypto assets, especially in stablecoins, for its decision, declaring virtual currencies unusable as money in the market. The bank is also committed to maintaining a strict oversight over cryptocurrencies in its fight against illegal activities.

The total value of the crypto market fell to $2.93 trillion while Bitcoin dropped below $92,000 following China’s decision.

Bitcoin started the year around $93,425 but fell to roughly $74,500 in April after US President Donald Trump generated significant uncertainties with his sweeping reciprocal tariffs.

It recovered after the tariff uncertainty waned and the US Federal Reserve entered its rate cut cycle, reaching a record high of $126,199 in October. The annual gain of Bitcoin rose to around 35% at that point.

The world’s largest cryptocurrency began to decline, reaching $80,667 on Nov. 21, its lowest since April, and fell even below that, wiping out all its gains for the year.

Ethereum followed a similar trend, starting the year at $3,345 and falling to $2,839. The world’s second-largest cryptocurrency lost over 6% throughout the year.

Ali Eselioglu, CEO of Turkish crypto exchange CoinTR, told Anadolu that while China banned crypto trading and mining, Hong Kong features a more open regulatory framework.

Eselioglu said that Beijing’s interventions in some tokenization projects and corporate stablecoin initiatives show that crypto activities in the region are kept under control, as China is working towards expanding its own digital currency project, which is now used by hundreds of millions of users.

“While China maintains its cautious and prohibitive stance on cryptocurrencies, it is also focused on creating a centralized alternative,” he said.

Eselioglu noted that the PBoC’s declaration that cryptocurrencies and stablecoins are illegal methods of payment brought uncertainties in global markets.

“Such statements from a superpower like China can have a short-term impact on risk appetite, and I can say that China’s statement was effective in the pullback in Bitcoin,” he said.

China’s current stance is nothing new — Eselioglu said this has been a continuation of a policy framework set in place since 2021.

“The impact on prices can be a short-term market reaction, but in the medium and long term, Bitcoin and other cryptocurrencies will be shaped by global macroeconomic conditions and US-centered regulatory developments,” he added.