【Policy Interpretation｜The Central Bank Again Emphasizes 'Cracking Down on Virtual Currency Trading Speculation', What Does It Mean for the Crypto Circle?】

Today, the central bank held a meeting with multiple departments, including the Public Security, Cyberspace Administration, Financial Regulatory Bureau, and Foreign Exchange Bureau, reiterating the need to crack down on virtual currency trading speculation, specifically mentioning:

(1) Virtual currencies do not possess legal compensation and are not considered legal tender;

(2) Activities related to virtual currencies are illegal financial activities;

(3) Stablecoins are also a type of virtual currency, which carry risks of money laundering, fraud, and cross-border fund transfers.

In simple terms: this is not a new regulation but a reiteration of the regulatory approach from 2021 that is 'comprehensive and strict', and requires continued high-pressure regulation.

1. Possible Impacts

(1) Sentiment: Short-term bearish

Such official statements can amplify panic sentiment, especially after experiencing significant volatility,

some leveraged longs and emotional traders may choose to reduce or close positions.

(2) Medium to Long-term: Regional regulation, not asset 'death sentences'

The long-term price core of $BTC and $ETH is still determined by global liquidity and institutional/fund allocation.

High-pressure regulation from a single country will impact participation paths and costs but is unlikely to fundamentally change global trends.

(3) Channel Pressure: Fiat ↔ Stablecoins are more sensitive

The article touches on stablecoins and cross-border funds; in the future, off-exchange, cross-border channels, and gray arbitrage activities will likely become increasingly stringent, with associated risk factors continuing to rise.

2. As a trader, what should you do?

Treat regulation as a 'constant', rather than a black swan

(1) Strictly control leverage and set stop-losses to avoid being caught off guard by market fluctuations;

(2) Focus on medium to long-term structural analysis, avoiding emotional trading on 1-minute charts;

(3) Diversify positions and avoid heavily betting on a single sentiment.

Compliance is always the premise

Being in China, it is essential to fully understand and comply with local laws and regulations,

do not participate in any activities deemed illegal financial activities, and do not act as an agent for others in investment, fundraising, or order-following.

The above is my personal understanding and record of this news, for communication purposes only, and does not constitute any investment advice. Trading is at your own risk, and please pay attention to risk control and compliance.