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Bitcoin Drops $2K as China Declares Cryptocurrency-Related Business Illegal
Bitcoin erased Thursday’s 3% gain as PBOC stepped up its crackdown on crypto
Updated May 11, 2023, 5:28 p.m. Published Sep 24, 2021, 10:03 a.m.
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China strengthened its anti-crypto stance on Friday, torpedoing bitcoin’s two-day winning run.
The People’s Bank of China (PBOC) said bitcoin, ether and stablecoin tether do not qualify as legal tender and cannot be used in the currency market.
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The central bank declared all virtual currency-related activities illegal, including derivative transactions and overseas virtual currency exchanges serving Chinese residents.
Bitcoin fell by nearly $2,000 to $42,800 after the PBOC news hit the wires, erasing Thursday’s 3% gain. The cryptocurrency was trading 4% lower on the day at 9:32 UTC.
China renewed its crackdown on cryptocurrency trading and mining in the second quarter amid pilot testing of the digital yuan. However, according to China journalist Colin Wu, the latest central bank statement is quite detailed and mentions tether as illegal for the first time. Tether, the largest stablecoin per market value, is widely used to fund crypto purchases and as collateral in decentralized finance.
Earlier this week, the New York Times reported that regulators might declare stablecoins a systemic risk. Further, U.S. Securities and Exchange Commission Chair Gary Gensler compared stablecoins to poker chips.
Analysts told CoinDesk on Thursday that regulatory uncertainty presents a major downside risk to bitcoin in the short term.
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KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
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Gold tops $5,000 as bitcoin stalls near $87,000 in widening macro-crypto split: Asia Morning Briefing
Bitcoin’s onchain data points to supply overhang and weak participation, while gold’s breakout is priced by markets as a durable macro regime shift.
What to know:
- Gold’s surge above $5,000 an ounce is increasingly seen as a durable regime shift, with investors treating the metal as a persistent hedge against geopolitical risk, central bank demand and a weaker dollar.
- Bitcoin is stuck near $87,000 in a low-conviction market, as on-chain data show older holders selling into rallies, newer buyers absorbing losses and a heavy supply overhang capping moves toward $100,000.
- Derivatives and prediction markets point to continued consolidation in bitcoin and sustained strength in gold, with thin futures volumes, subdued leverage and weak demand for higher-beta crypto assets like ether reinforcing the cautious tone.
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