The flagship newspaper of the Chinese Communist Party has published an editorial warning against the perils of speculation in bitcoin and other cryptocurrencies, as well as flagged heightened scrutiny of the sector.
The editorial entitled “The Heat of ‘Coin Speculation’ Should Cool Down – Regulation Is Continuing Intensify” (‘ 炒币’热该降降温，监管仍在继续加码) was published by the People’s Daily on 12 February 2018.
“Following the issuance of a ICO activity risk prevention warning at the start of January, the National Internet Finance Association of China recently issued another warning that investors should be well aware of the risks involved with off-shore ICO and ‘virtual currency’ trading platforms.
“In addition to this, it is believed that China is about to adopt regulatory measures directed at overseas virtual currency online trading platforms, and that regulation of virtual currencies is continuing to intensify.
“Prior to regulators ‘cooling things down,’ the popularity of virtual currencies as represented by bitcoin appeared unassailable. Taking bitcoin alone as an example, in 2017 it became a topic of heated discussion on street corners, with some people even claiming that ‘speculation in shares or homes isn’t as good as speculation in coins.’
“Following the sharp rise in bitcoin prices, related mining activity has increased, and there are some people who have become overnight millionaires by ‘mining coins,’ as well as others who have become penniless in seconds.
“Although investors appear to be unrelenting in their hunger for bitcoin, the risks and problems of speculation, volatility, money-laundering and corruption in the background have triggered a high level of concern amongst regulators.
“Faced with this current investment fervour, there is definitely a need for a cooling down.”