While China’s declaration that all crypto transactions are illegal on Friday has led to a sell-off of Bitcoin, Ethereum, and other digital tokens, longtime watchers of the crypto world might be feeling a sense of déjà vu.
This is far from the first time China has spoken out against Bitcoin. While the most recent campaign might feel like the most aggressive to date, it’s worth remembering that this dance between Chinese regulators and the world of digital currency has been going on since 2013.
Headlines about China’s scrutiny and regulatory interests have popped up several times in the past eight years—and generally, that has resulted in a sell-off. Case in point: The price of Bitcoin fell 3.6% to $42,200 on the news today. But when the news cycle is over, inevitably, crypto prices have started to rise again.
The story from China has been fairly consistent through the years. Chinese regulators worry cryptocurrencies might weaken the Communist Party’s control over the financial system. They’ve also expressed concerns about criminal activity.
But how has the market reacted to these threats in the past?
Dec. 5, 2013
China forbade financial institutions from handling Bitcoin transactions. The People’s Bank of China announced it wasn’t a currency with “real meaning”.
Immediate impact: Bitcoin prices fell more than 20% to $889.
Long-term impact: Obviously, Bitcoin recovered. The crypto is up more than 4,600% since that date.
March 27, 2014
Rumors began to circulate that the Chinese government would penalized banks that took part in Bitcoin transactions.
Immediate impact: Bitcoin prices tumbled nearly 12% to $562
Long-term impact: Traders shook it off. Bitcoin’s up 7,345% since that date.
Feb. 9, 2017
Reports emerged that the People’s Bank of China was tightening regulatory pressure and pushing the country’s Bitcoin exchanges to come into full compliance with anti-money laundering rules.
Immediate impact: Bitcoin and other cryptos fell more than 7% to around $988.
Long-term impact: The dip was a short one. Today, Bitcoin prices are 4,135% higher than they were that day.
Aug. 24, 2018
Authorities in China once again stepped up pressure on cryptocurrency speculation, with five government bodies—the People’s Bank of China, the Banking Regulatory Commission, the Central Cyberspace Affairs Commission, the Ministry of Public Security, and the State Administration for Market Regulation—issuing a warning about illegal fundraising via “blockchain” and “cryptocurrencies.”
Immediate impact: Investors largely ignored this threat, with Bitcoin climbing from $6,494 to $6,750 and finishing the day up 4%.
Long-term impact: The climb has continued. Bitcoin’s up 520% since then.
May 21, 2021
China authorities began ratcheting up the rhetoric, saying tighter security was needed to protect the financial system and calling for a crackdown on bitcoin mining.
Immediate impact: Bitcoin fell more than 8.5%
Long-term impact: Long-term is probably the wrong language since it has only been four months, but Bitcoin’s price is 12% higher today than it was on May 21.
More finance coverage from Fortune:
- Two weeks later, how is El Salvador’s Bitcoin strategy going?
- Bus driver shortage has states looking to National Guard to transport kids to school
- How women think about crypto in 5 charts
- Snoop Dogg reveals himself as NFT kingpin Cozomo de’ Medici
- Germany’s answer to AirBnB hopes to spark a SPAC boom in Europe
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.
