On February 6, 2026, the People's Bank of China and eight other departments jointly issued a notice titled "Notice on Further Preventing and Handling Risks Related to Virtual Currencies," tightening regulations once again within the existing framework, sending a clear signal of "comprehensive blockage and strict enforcement." During the same period, the price of Bitcoin fluctuated around $67,000/USDT, with a 24-hour decline of approximately 3.83%, amplifying the market's focus and interpretation of China's policies. On the surface, this is a direct linkage between high-pressure regulation and price correction; at a deeper level, it reflects the long-term game between China's regulatory pressure and the resilience of the global crypto market: one side attempts to completely compress the crypto trading space domestically, while the other maintains price stability under the influence of global liquidity and institutional funds.

Eight Departments Take Action: Comprehensive Blockage of Trading and Service Interfaces

● Notice Subject and Positioning: The notice titled "Notice on Further Preventing and Handling Risks Related to Virtual Currencies" was jointly issued by the People's Bank of China and eight other departments, continuing the main line of financial regulation focused on "risk prevention and maintaining bottom lines." The document is not an isolated new regulation but a reaffirmation and refinement of the existing regulatory framework, aimed at blocking all institutional gaps and execution blind spots related to relevant business activities within the country through departmental collaboration.

● Key Prohibitive Actions: The notice explicitly states the need to continue rectifying virtual currency mining activities, indicating that previous rounds of shutdowns are not seen as "phase tasks" but rather as part of normalized governance; it also reiterates the prohibition of financial institutions and payment institutions from providing services such as account opening, clearing, and settlement for related businesses, further isolating the banking and payment systems from this asset class, intending to cut off its direct connection with the real economy and residents' wealth management from the funding and payment sides.

● Continuation and Strengthening of Policy Attitude: Relevant officials from regulatory departments publicly emphasized that "a prohibitive policy stance on virtual currency-related business activities will always be maintained domestically," consolidating a series of measures from the past few years into a clear main line. Compared to the earlier ambiguous space of "risk warnings + window guidance," the use of terms like "always" and "prohibitive" this time reinforces the continuity and irreversible expectations of the policy, sending a signal to the market that "no regulatory gray area will be left."

The $67,000 Tug-of-War: Price Elasticity Under Policy Heavyweight

● Price Fluctuation Rhythm: During the period of the notice's release and the ensuing public discourse on February 6, 2026, Bitcoin fluctuated around $67,000/USDT, with the price oscillating multiple times near this central point throughout the day. There was no continuous sharp decline in the market; instead, it exhibited a rhythm of initial downward movement followed by stabilization in a high range, indicating a rapid rebalancing of buying and selling forces in response to the news stimulus.

● Sensitive Reaction to 3.83% Decline: According to data from Jinse Finance, Bitcoin recorded a decline of approximately 3.83% within 24 hours, showing significant sensitivity to the news of China's regulatory measures. The short-term selling pressure mainly stemmed from expectations that "regulatory upgrades" could trigger new prohibitive measures, but the decline, relative to historical instances of double-digit daily drops, remained within a controllable range, reflecting more of an emotional release and repricing rather than a trend reversal inflection point.

● Contrast Between Heavy Regulation and Limited Correction: On one side, there is the joint issuance by eight departments and the high-frequency emphasis on a "prohibitive stance," while on the other side, Bitcoin stabilized above $60,000 after only shedding a few percentage points from its high. This contrast highlights the "dulling" and resilience of global funds against the impact of regulatory shocks from a single country. The price has not deviated from the medium to long-term upward channel, indicating that pricing power is increasingly dominated by global liquidity and institutional allocation logic, rather than being entirely constrained by single market sentiment.

Gray Areas and Offshore Channels Under Domestic High Pressure

● Long-term Tightening Trajectory: From the early rectification of domestic exchanges to multiple rounds of concentrated governance on mining, and now to this notice jointly issued by eight departments, China's regulation of related businesses has shown a continuous tightening rather than a "sudden turn." Each stage of policy has further clarified the responsible parties and prohibited areas based on the previous round, gradually extending the logic of "preventing and handling risks" to the entire chain of mining, trading, and financial services.

● Squeezing of Gray Operational Space: Against the backdrop of the basic blockage of formal financial channels, OTC matchmaking, person-to-person offline trading, and "offshore account opening," which were once gray paths, are now facing intensified compliance pressure. This round of notice has once again pushed the responsibilities of financial institutions and payment institutions forward, significantly increasing the difficulty for domestic funds to flow to offshore platforms through traditional banking systems, further compressing the gray operational space and leaving an increasingly narrow window for "technical detours."

● Determination to Leave No Stock or Interface: The repeated emphasis on the "prohibitive stance" in regulatory statements has been interpreted by the market as a commitment not only to block new funds and new businesses but also to gradually clean up existing stock and dismantle all intermediary interfaces that could form "de facto channels." This round of statements has reinforced the expectation of "no stock or interfaces left domestically," forcing participants to reassess the compliance and risk-reward ratio of continuing related activities within the country.

The Dilemma of Chinese Funds: Offshore Layout vs. Domestic Compliance

● Offshore Allocation Path: Under the domestic ban framework, some institutions and high-net-worth investors are turning their attention to Hong Kong and other overseas platforms, indirectly allocating related assets through offshore company structures, family trusts, or qualified foreign investment tools. This model is formally isolated from domestic regulation but still carries the risk preferences of Chinese funds, making the combination of "overseas compliant platforms + local investors" a practical compromise.

● Differentiation of Institutional Exit and Capital Migration: Under high-pressure regulation, domestic compliant financial institutions have been largely forced to exit completely to avoid compliance and reputational risks, while some capital actively seeking high returns has chosen to migrate offshore. The result is a clear differentiation within the same batch of Chinese funds: on one end are institutional funds strictly adhering to regulatory requirements and completely severing related businesses, while on the other end are high-risk preference funds continuing to participate through offshore tools.

● Fund Reordering After Clear Regulatory Red Lines: Rather than saying funds are withdrawing unidirectionally, it is more accurate to say they are accelerating reordering after the red lines have become clearer. Some funds are shifting to compliant offshore channels, accepting more mature regulatory rules; others are choosing to completely exit related markets, reallocating their risk budgets to domestically regulated assets. This structural migration is reshaping the role and weight of Chinese funds in the global crypto market, rather than simply a binary narrative of "withdrawing" or "staying."

Shift in Global Narrative Dominance: China's Tightening vs. Overseas Expansion

● Time Displacement of Two Curves: On one hand, China continues to tighten regulations on related businesses through this notice, emphasizing risk prevention and a prohibitive stance; on the other hand, overseas markets are accelerating the institutionalization process, with large institutions entering the market and ETF product expansions continuously emerging as long-term positive narratives. Regulatory tightening and financial innovation, product expansion are almost parallel on the same timeline, forming a time displacement curve of "domestic contraction, overseas expansion."

● Transfer of Discourse Power and Innovation Center: As China marginalizes its participation in the crypto industry, global innovation and discourse power are increasingly concentrating in regions with loose yet predictable regulatory frameworks. Whether in mining hash power, developer communities, or financial engineering around ETFs and derivatives, dominance is gradually shifting to North America, Europe, and some Asian financial centers, while China's presence in this wave of technological and financial integration is passively weakened.

● Dual-Track Structure of Global Pricing and Local Compliance: This has resulted in a dual-track structure of "prices determined globally, compliance rules set locally." On one hand, the prices of assets like Bitcoin are more influenced by global funds, macro liquidity, and institutional products, making it difficult for a single market to sway overall pricing; on the other hand, regulatory authorities in various countries set different entry and prohibition boundaries based on their financial stability and capital control needs. This structure lays the groundwork for how China will seek a balance between "controllable risks" and "participating in global innovation" in the future.

The Endgame of High-Pressure Regulation: Risk Clearance or Absence of an Era

In the short term, this round of notice has created stronger compliance pressure for domestic participants, prompting institutions and individuals to reassess the costs and risks of continuing to engage in related activities; for trading channels, the renewed blockage of banks and payment systems has further compressed the survival space of formal and gray interfaces; in terms of market sentiment, although Bitcoin recorded a daily decline of about 3.83%, the emotional fluctuations are more concentrated in the Chinese-speaking community, with limited impact on the overall global price center.

From a long-term tension perspective, China's regulation logically insists on "risk prevention first," viewing related businesses as financial risk sources that need to be reduced and isolated; while the global market primarily advances according to the logic of "technological evolution and capital efficiency," seeing it as part of a new asset class and infrastructure. This difference in value orientation and policy objectives creates a structural tension that is difficult to resolve between China and the global crypto ecosystem.

If future policy tones continue to maintain a "prohibitive stance" without more flexible pilot and sandbox mechanisms, China may achieve relative control over domestic risks while partially missing the next round of crypto finance and on-chain innovation cycles. For regulators, this represents a proactive trade-off between financial stability and technological frontiers; for market participants, it means they must make clearer and more difficult choices between compliant exit from the domestic market and compliant participation in the offshore market.

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