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Author: Viee, Amelia, Denise, Biteye content team
Recently, the seven major financial associations in the Mainland issued the latest risk warning, naming various virtual assets such as stablecoins, RWA, and air coins.Although Bitcoin has not shown any obvious changes at present, the recent cooling of market sentiment, shrinking accounts, and USDT over-the-counter discounts have reminded people of the scenes of past rounds of policy tightening.
Since 2013, mainland China has been regulating the encryption field for twelve years.Policies have been implemented time and time again, and the market has responded time and time again.This article wants to follow the timeline, review the market reaction at these key nodes, and also clarify a question: after the implementation of supervision, will the encryption market go into silence, or will it gather strength and start again?
1. 2013: Bitcoin is defined as a “virtual commodity”
On December 5, 2013, the People’s Bank of China and five other ministries and commissions jointly issued the “Notice on Preventing Bitcoin Risks”, which clarified for the first time that Bitcoin is a “specific virtual commodity” that is not legally compensable and does not belong to currency.At the same time, banks and payment institutions are prohibited from providing services for Bitcoin transactions.
The timing of this notice is also very subtle, just after Bitcoin hit an all-time high of about $1,130 at the end of November.In early December, the price of Bitcoin was still fluctuating between $900 and $1,000, but a few days after the policy was implemented, the market began to cool down rapidly.Throughout December, Bitcoin’s closing price fell to about $755, a monthly decline of nearly 30%.
In the following months, Bitcoin fell into a long downward fluctuation range, with the price basically at $400-600. This round of decline from the high basically announced the end of the 2013 bull market.The price of Bitcoin continued below $400 until the end of 2015.
The first round of supervision extinguished the early enthusiasm and kicked off the game of “policy and market”.
2. 2017: ICO Ban and Exchange “Great Migration”
2017 was a year of extreme turmoil in the encryption market, and also a year of the most decisive regulatory efforts.On September 4, seven ministries and commissions issued the “Announcement on Preventing Financing Risks of Token Issuance”, defining ICO as illegal financing and requiring domestic exchanges to shut down completely. Bitcoin closed at around US$4,300 that day.However, a week after the policy was released, BTC fell to as low as $3,000.
Although this round of regulation cut off the dominant position of mainland exchanges in the short term, it failed to shake the foundation of the global bull market.As trading activities quickly moved out of Singapore, Japan, South Korea and other places, Bitcoin experienced an accelerated rebound after completing the phased clearing. It began to rise in October. Three months later, in December 2017, the closing price of Bitcoin soared to $19,665.
The second round of regulation brought about a short-term shock, but it also invisibly promoted the spread of globalization.
3. 2019: Precise local rectification
Since November 2019, Beijing, Shanghai, Guangdong and other places have successively conducted surveys on virtual currency-related activities, and the supervision method has shifted to “local precision rectification”, and the intensity has not been relaxed.That month, Bitcoin fell from more than $9,000 at the beginning of the month to around $7,700, and market sentiment was once depressed.
The real trend turning point occurred in the following year.In 2020, driven by the expectation of halving and easing global liquidity, Bitcoin stepped out of the bull market preheating from US$7,000 to US$20,000+, and successfully connected to the epic bull market in 2020-2021.
The third round of regulation has, in a sense, cleared the path for the next stage of upward growth.
4. 2021: Comprehensive lockdown, mines cut off power
In 2021, regulatory intensity will reach its peak.This year saw two landmark events that completely reshaped the structure of the global crypto market.In mid-May, the Financial Affairs Commission of the State Council clearly proposed “cracking down on Bitcoin mining and trading.”Subsequently, major mining provinces such as Inner Mongolia, Xinjiang, and Sichuan successively introduced withdrawal policies, forming a nationwide “mining machine power outage wave.”On September 24, the central bank and ten other ministries and commissions jointly issued the “Notice on Further Preventing and Dealing with the Risks of Speculation in Virtual Currency Transactions”, officially clarifying that all virtual currency-related activities are illegal financial activities.
Bitcoin fell from $50,000 to $35,000 in May.Entering June and July, BTC was trading sideways in the range of US$30,000–40,000, and market sentiment hit rock bottom. Then Bitcoin bottomed out and rebounded in August, continuing to rise driven by optimistic expectations of global liquidity, and finally hit a record high near US$68,000 in November.
In the fourth round of regulation, policies can draw boundaries, but they cannot stop the global redistribution of computing power and capital.
5. 2025: Reversal of expectations – from “innovative testing” to “comprehensive tightening”
The regulatory narrative of 2025 is full of dramatic turns.In the first half of the year, a series of signals made the market smell the “melting ice”, and a cautious optimism pervaded the circle: whether it was the discussion on the stable currency issuance framework in Hong Kong, or the “Malu Grape” chain in the suburbs of Shanghai, the market began to discuss the possibility of “compliance path” and “China model”.
The tide changed suddenly at the end of the year.On December 5, seven major financial associations jointly issued a risk warning. The core message is very clear:
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Make it clear that virtual currency is not legal tender
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Named to combat popular concepts such as air coins, stable coins, and RWA
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Not only is trading prohibited within the country, but publicity and diversion are also prohibited, and supervision has begun to become more detailed.
The core upgrade of this risk warning is that: It not only reiterates the illegality of virtual currency transactions;For the first time, it has spread to the most popular segmented tracks (stablecoins, RWA) and promotion activities.
So how will the market behave this time?What is different from the past is that Chinese funds are no longer market dominant, and Wall Street ETFs and institutional positions have become the new main players.What can be seen is that USDT has a negative premium, which shows that many people are eager to exchange for legal currency and leave the market.
6. Market voices: KOL’s opinions summarized
Well-known media person Wu said @colinwu starts from the implementation level and reminds everyone to pay attention to the trends of CEX.The real trend depends on whether the platform restricts domestic IP, KYC registration and C2C functions.
XHunt founder @defiteddy2020 compared mainland China and Hong Kong and believed that the two worlds of encryption policy reflect different market positioning and regulatory philosophies.
Solv Protocol co-founder @myanTokenGeek believes that this round of regulation may bring two consequences: first, users and projects will accelerate their overseas expansion, and second, underground gray channels will make a comeback.
Lawyer Liu Honglin @Honglin_lawyer, founder of Shanghai Mankiw Law Firm, added from a legal perspective that many RWA projects are indeed non-compliant. They engage in financing and solicitation under the banner of compliance, which is essentially the same as fraud.For teams that really do things, going overseas is the only solution.
Cryptocurrency OG @Bitwux believes that this is an official confirmation of something the industry has known for a long time, and the impact is limited.Supervision is more about repeating old words, and the focus may be on preventing the spillover of gray zone channels.
Independent trader @xtony1314 said that the police took the lead this time, and he was no longer just talking.If subsequent law enforcement actions and restrictions on trading platforms are initiated, it may trigger a round of “active flight + market stampede.”
Independent trader @Meta8Mate believes that every time a concept gets overheated, there is a risk warning.2017 was ICO, 2021 is mining, and this time it’s the turn of stablecoins and RWA.
7. Conclusion: The storm never stops the direction of the tide, it just changes the sailing path.
Looking back on the past twelve years, we can clearly see a logical main line that is constantly evolving and has clear goals:
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Regulatory policies are consistent and necessary and reasonable.A grain of sand from the times becomes a huge mountain when it falls on an individual.There is no need to elaborate on the impact of regulatory policies on the industry, but we have to admit that regulation is to protect investors from uncontrollable financial risks and maintain the stability of the local financial system.
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Regulatory action has a clear “timing” nature.Policies are often implemented when market heat reaches its peak or local peak, aiming to cool down the risk of overheating.From the Oxtail in 2013, the ICO craze in 2017, to the peak of mining in 2021, and now the concept of stablecoins and RWA is heating up, this is the case.
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The long-term effects of policies are fading.Except for the first round of regulation in 2013, which directly ended the bull market cycle at that time, several subsequent strong interventions (shutdown of exchanges in 2017 and withdrawal of mining in 2021) have not changed the long-term upward trend of Bitcoin.
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Bitcoin has become a “global game”.ETFs on Wall Street, sovereign funds in the Middle East, institutional custody in Europe, and even the consensus of global retail investors together form the main support for the current price.
A core conclusion is: The binary pattern of “Eastern strict defense” and “Western dominance in pricing” may become the new normal in the crypto world.
