Will Bitcoin fall?
1. Why did China ban Cryptocurrency?
The People’s Bank of China (PBoC) cited environmental concerns and financial crime, but the core reasons are strategic:
- Capital Flight: Crypto allows wealth to exit China without government oversight, bypassing strict capital controls.
- Sovereign Control: Decentralized currency threatens the state’s monopoly on money.
The e-CNY (Digital Yuan): China is launching its own Central Bank Digital Currency (CBDC).
Banning competitors like Bitcoin clears the path for the e-CNY, which offers the government total visibility into transactions.
2. Will Bitcoin Fall?
Short Answer: No, it has already adapted.
- The “China Ban” Effect: China has “banned” crypto multiple times (2013, 2017, 2021). Each time, the price dropped temporarily but recovered to new highs.
- The Great Migration: Following the 2021 ban, Bitcoin mining power (hash rate) did not die; it migrated. The US, Kazakhstan, and Canada absorbed the miners, arguably making the network more decentralized and secure by removing reliance on a single authoritarian jurisdiction.
Extended analysis
Capital controls: the real red line
China maintains some of the world’s strictest capital controls, limiting how much money individuals and firms can move abroad each year. Cryptocurrencies posed a direct challenge to this system by enabling peer-to-peer transfers outside the banking network. Chinese regulators warned as early as 2013 that Bitcoin could be used to facilitate illegal cross-border capital movement and underground banking [1].
Financial surveillance versus decentralisation
From Beijing’s perspective, decentralised finance undermines the state’s ability to monitor economic activity, enforce taxation, and prevent social instability. Senior Chinese officials have repeatedly framed crypto assets as a risk to “financial order,” signalling concern over loss of regulatory and political oversight rather than market volatility alone [2].
Digital yuan as a strategic weapon
The rollout of the e-CNY is central to China’s long-term monetary strategy. Unlike Bitcoin, the digital yuan is programmable, traceable, and directly controlled by the central bank. Policy analysts argue that eliminating private cryptocurrencies removed friction for large-scale adoption of the e-CNY and strengthened Beijing’s grip on digital payments [3], [4].
Environmental narrative: a supporting argument
While China officially cited energy consumption and carbon emissions from Bitcoin mining, academic studies suggest environmental reasoning was a supporting justification, not the primary driver. Mining bans aligned conveniently with broader industrial restructuring and carbon-reduction pledges[5].
Bitcoin after China: stronger, not weaker
Hash rate recovery and decentralisation
After the 2021 crackdown, China’s share of global Bitcoin mining fell from over 60% to near zero. Yet within months, the global hash rate fully recovered as miners relocated to North America and Central Asia. This shift reduced geographic concentration risk and improved network resilience[6], [7].
Market response and institutional confidence
Each successive Chinese ban has had diminishing impact on Bitcoin’s long-term price trajectory. Analysts note that markets now treat China’s hostility as a known variable. Meanwhile, institutional adoption has accelerated in jurisdictions with clearer regulatory frameworks, including the US and parts of Europe[8].
Conclusion
China banned cryptocurrency not because it failed, but because it succeeded outside state control. The move fits Beijing’s broader push toward programmable, surveilled money under sovereign authority. Bitcoin, meanwhile, absorbed the shock, redistributed its infrastructure globally, and emerged less dependent on any single country — including China.
References:
[1] China steps up crypto crackdown, will vet real-world asset tokens – February 7, 2026, reuters.com
[2] China’s central bank says all cryptocurrency-related activities are illegal, vows harsh crackdown – Sep 24 2021, cnbc.com
[3] Central bank digital currencies: foundational principles and core features – October 9, 2020, bis.org
[4] Xi Jinping calls for China’s renminbi to attain global reserve currency status – ft.com
[5] Policy assessments for the carbon emission flows and sustainability of Bitcoin blockchain operation in China – April, 06, 2021, nature.com
[6] Bitcoin Mining Map – ccaf.io
[7] Bitcoin mining in China rebounds, defying 2021 ban – November 24, 2025, bnnbloomberg.ca
[8] China Never Completely Banned Crypto – Jun 15, 2024, coindesk.com
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