China Bans Crypto Trading and Mining on May 31, 2025
On May 31, 2025, the Chinese government officially imposed a full ban on cryptocurrency trading and mining, including major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and others. This sweeping move has sent shockwaves throughout the global crypto market.
📉 Immediate Market Impact:
Within just 24 hours of the announcement, the crypto market plummeted by over 10%.
Bitcoin dropped sharply from above $111,000 to below $104,000.
Other major cryptocurrencies like Ethereum, XRP, Dogecoin, and PEPE also suffered significant losses (some over 12%).
The total crypto market cap fell to nearly $3.3 trillion, wiping out hundreds of billions in investor value.
⚠️ Why Did China Ban Crypto?
Energy Consumption Concerns: Crypto mining, especially Bitcoin, consumes a massive amount of electricity. China has been aiming to reduce its carbon footprint.
Financial Stability: The Chinese government sees unregulated digital assets as a threat to its financial system and national currency (the yuan).
Crackdown on Illegal Activities: Cryptocurrencies are often used in activities like money laundering and illegal cross-border transactions, which authorities aim to curb.
Support for Digital Yuan: China is pushing its own Central Bank Digital Currency (CBDC) — the Digital Yuan, and wants to eliminate competition.
📊 Global Reactions & Implications:
Investor Panic: Many investors, especially in Asia, started liquidating their positions fearing stricter regulations in other countries.
Hashrate Drop: Bitcoin’s global mining hashrate fell temporarily due to the shutdown of mining farms in China.
Regulatory Ripple Effect: Other countries may follow China’s lead, tightening crypto regulations to control capital flow and maintain monetary sovereignty.
Increased Volatility: The news led to high volatility across crypto markets, with massive liquidations (~$750 million) in long positions.
🗣️ Expert Opinions:
Some analysts see this as a short-term setback and a healthy market correction.$BTC