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Decoding the copycat season: 6 strategies for winning
Original author: CryptoAmsterdam, crypto analyst
Original translation: TechFlow
1. When will the alt season come?
I think the alt season will come soon. Here are some key analysis points:
1.1 The cycle is divided into two stages
· Stage 1: Bitcoin price rises, altcoin price falls (Bitcoin market share rises).
· Stage 2: Bitcoin breaks through the historical high, and altcoins begin to enter a rapid rise stage.
This pattern can be seen more clearly in the following figure:
In this phase, we started accumulating altcoins when the total market value of altcoins was at the low point of the range. I believe that the price of altcoins will break through new highs like Bitcoin.
Currently, Phase 2 has been launched!
For more details, please see: Link.
1.2 Capital Flow Law
The starting point of the bull market can be traced back to the end of 2023, when Bitcoin bottomed out, returned to the range and rose to the previous high, while altcoins depreciated against Bitcoin and Bitcoin's market share increased.
When Bitcoin broke through its historical high (that is, the current stage), funds began to flow to large-cap altcoins. From the Total 3 (the total market value of the top 100 altcoins minus BTC and ETH) chart, although it is currently mainly driven by large-cap coins (such as XRP), the performance of small and medium-cap coins is also catching up.
Eventually, funds from Bitcoin and large-cap coins will gradually flow into small and medium-cap altcoins.
As market sentiment rises, investors will become more greedy and start chasing small and medium-cap altcoins. I expect "other" medium-cap altcoins to reach new highs. The real altcoin season is still ahead.
1.3 Bitcoin Dominance
Each cycle has a similar pattern: when the price of Bitcoin breaks through the previous high and rises for the first time, its market share will begin to decline.
Currently, Bitcoin's market share has broken an upward trend that has lasted for more than 800 days.
1.4 ETHBTC Trend Analysis
Each cycle, Ethereum will be weak in the early stage (Bitcoin rises but is still below the previous high), and then start to rebound when Bitcoin stands above the previous high.
The current cycle is no exception. More funds are expected to flow into Ethereum ecological tokens, on-chain utility tokens, and high-risk tokens. Once ETHBTC really enters an upward trend, the performance of these tokens will be even more impressive.
ETHBTC Chart Analysis
Currently ETHBTC has retraced and re-entered the range low.
Failed to break through the resistance level of Phase 4 in 2021. Can we usher in the "super rise" of Phase 5 in this cycle?
If the current downward trend line is broken, it will end a 1,100-day bear market trend.
In addition, 2024 is also an important year for the launch of the Ethereum ETF (Exchange Traded Fund), and I think the market still underestimates the potential of Ethereum.
2. Have you missed the opportunity?
As mentioned earlier, the Amsterdam team has accumulated altcoins at the Total 3 market cap lows in the past 5-6 months.
At the low point of the range, it is recommended to:
· Buy at key support levels;
· Gradually build positions in a slow and volatile market, rather than chasing the rise;
· Set a clear stop loss point (such as below the range);
· The market is less volatile and easier to hold.
But if you choose to buy after the price rises vertically:
· You may not have a clear stop loss point. For short-term traders, this may not have much impact, but for long-term investors, not having a stop loss point will increase the risk.
· The profit opportunity from the low to the high of the range has disappeared, and now the bet becomes "Can the market value of altcoins break new highs?"
· Buying in the stage of rapid price increase will face higher market volatility, and 20-30% corrections are not uncommon.
So, I think it's not too late for you, because:
· Bitcoin still has room to rise.
· The capital rotation has not yet fully reached the stage of small and medium-cap altcoins (the "Others" chart shows that it may set new highs), so the most profitable stage has not yet arrived.
· Bitcoin dominance may fall further, and the ETHBTC ratio will rise.
But please note the following:
· Understand what phase of the current market cycle you are in.
· Be clear whether you are entering a currency for short-term trading or long-term investment.
· Have a clear profit plan.
· Understand that this is a period of high volatility and rapid declines of 10%-30% are possible.
· Accept that these rapid declines are difficult to predict and that you may undermine your longer-term investment plans by trying to trade these pullbacks.
For the "risk" analysis of entering the market at this stage (rather than entering the market in the past 3-6 months): please refer to here.
3. Advice on how to enter the market:
If you missed the accumulation period of the past 6 months, you first need to think about why you missed it.
It is likely that you are affected by emotions:
· In a bull market, prices usually rise very quickly with almost no obvious and sustainable pullback.
· Many people miss the opportunity to rise, and when they chase high because of "fear of missing out", the market often enters a stage of shock or rapid decline.
· In the shock, they become pessimistic again, and eventually miss the opportunity for a rapid rise again.
The correct strategy is: build positions in batches during the shock or pullback stage, and remain patient and focus on the market structure of the longer time frame.
For more information, please refer to here.
Next are specific suggestions!
Suggestion 1: Stick to spot trading and avoid leverage
Prefer spot trading.
Many people are used to using leverage, but this is actually a trap. Every market fluctuation makes people feel like an "opportunity", but in fact most of the time it is not. You don't need to rush to operate. Leveraged trading will eventually make most people lose money or even go to zero - don't let it ruin your bull market gains.
Stick to spot trading so that you won't be unable to hold a position due to excessive leverage, or even worse, be forced to close your position and miss market opportunities.
Trust me, stay away from leverage trading.
Advice 2: Don't chase the rise, focus on the pullback
Most people trade based on emotions and only buy when the price rises (green candles) because it makes them feel "safe".
But the market will not rise in a straight line, even in a bull market there will be pullbacks:
· Daily fluctuations: small pullbacks of a few percentage points.
· Every few weeks: panic drops of 10%-30%.
If you buy when the price rises, you will most likely sell in panic when it pulls back.
· You feel relieved when buying on the rise.
· You feel relieved when selling on the fall.
But the right strategy is:
· It may scare you when buying, but it is the right time.
· You may feel reluctant when selling, but it is a rational choice.
If you can go against the trend, open a position on a pullback, and buy boldly on a panic decline, you will have an advantage over most people.
Advice 3: Build positions in batches and be patient
So far:
· Choose spot trading only.
· Don’t chase the rise, but build positions when there is a pullback.
Also, you don’t need to invest all your money at once.
You can choose to build positions gradually. If the price drops by 5%, you put all your money into altcoins at once, then if the market sees a bigger correction (such as a drop of 10%, 20% or even 30%), you may sell out in panic.
The correct strategy is: invest 10% of your funds when the price drops by 5%. In this way, when there is a bigger pullback (such as 10%, 20% or 30%), you can continue to gradually increase your position instead of being thrown out by market fluctuations.
What if the pullback doesn’t deepen further? That’s OK. Don’t invest all your money at once because you’re afraid of missing out, as this may force you out of the market in a deeper pullback.
There will be more pullbacks and opportunities to build positions in the future.
In a highly volatile market, you can’t perfectly grasp every fluctuation. You don’t need to buy at the lowest point or sell at the highest point, just focus on long-term gains.
Suggestion 4: Control risks and avoid excessive risk-taking
You may have heard of those legendary stories of “all-in” making millions, but excessive risk-taking will greatly test your psychological tolerance. If your position is too heavy, you may be forced to sell out of panic when the market pulls back, and ultimately miss out on bigger opportunities.
Tip 5: Develop a plan that works for you
Don’t just copy someone else’s plan. Instead, develop a clear investment plan based on your own goals and risk tolerance. This plan should include risk management and multiple response plans in case the market does not move as expected.
A good plan can keep you calm in market fluctuations, avoid making wrong decisions due to panic or excitement, and help you gradually achieve profitable exits.
Here are some points to clarify in your plan:
· Keep it simple:Don’t make your plan too complicated.
· Focus on long-term frames (HTF):Focus on big trends, not short-term fluctuations.
· Clear goals:
-What market signals do I want to see?
-Which tokens do I want to invest in? Why do I choose them?
-How much money do I plan to invest?
-In which price ranges do I build positions in batches?
-When do I exit?
For how to make a periodic profit plan, you can refer to this tweet.
Suggestion 6: Focus on long-term frames and keep strategies simple
· Only focus on long-term frame (HTF) charts to avoid being disturbed by short-term fluctuations.
· You only need to focus on the key price ranges and market structure, and don't have to pay attention to too much market noise.
· Keep your strategy simple and clear.
Even a simple strategy can give you an edge in the market:
· Most people use leverage to trade, but you don't.
· Most people chase highs when prices rise (green candles), but you don't.
· Most people don't have a clear profit plan, but you have your own plan.
· Most people buy or sell all at once, but you choose to build and exit positions gradually.
Before sharing my altcoin watchlist, let me talk about an important point:
Point of view:
In the current market, altcoins ("Others" market value) are expected to hit new highs and attract capital inflows from Bitcoin and mainstream currencies.
Currently, the "Others" market value is slightly above the midline of the range and is gradually approaching the high of the range.
It should be noted that the high of the range is usually a strong resistance area, and there may be multiple tests and pullbacks before breaking through. This is often easily overlooked when the market is strong (such as today's "green").
Recall Bitcoin's performance before breaking through the high of the range: it experienced multiple pullbacks and shocks before successfully breaking through.
Even looking back at the last bull cycle, at the beginning of the alt season, the “Others” market cap chart saw a sharp 30% correction before breaking through the range high.
So keep the following in mind:
Before the full-blown alt season arrives, the market may experience a large correction, and there may even be weeks of decline.
But don’t try to predict these corrections and wait, instead adopt the following strategy:
· Build positions slowly: gradually increase your position, don’t invest all your funds at once.
· Avoid using leverage: leveraged trading is extremely risky and may result in forced liquidation.
· Buy on pullbacks: Focus on building positions when the market falls (red candles) rather than chasing prices when they rise (green candles).
Be patient and follow a long-term strategy, and you will be more likely to profit from market fluctuations.
1.$SOL
SOL is a strong large-cap coin at the moment, showing clear advantages in this round of market cycle - this is a choice worth paying attention to.
From a market cycle perspective, I expect SOL to break through the current range high and have significant upside potential when the price enters the "discovery phase" (that is, after the price reaches a historical high, the market explores its true value).
At present, you can consider building positions in batches at this stage, but it should be noted that the current price is in the resistance area of the high range. If you buy all at once, you may not be able to withstand the 10%-30% price pullback that may occur in the future. Therefore, it is recommended to strictly follow the plan of building positions in batches.
In addition, it is recommended to use spot trading to avoid leverage operations. The following is my operating idea:
· Wait for the price to break through the high of the range and then build a small position first.
· If the price continues to rise and stabilizes at a high level, you can continue to add positions in batches.
· If the price falls back to the bottom of the range and breaks through again, this is another opportunity to add positions.
· If the price pulls back to the previous shock range, it can also be used as an opportunity to build positions in batches.
· When the price rises again after a pullback and breaks the short-term downward trend line, you can also consider adding positions.
In short, make a clear response plan for various possible market trends and gradually build positions through spot trading.
2. $BLUR
BLUR is a relatively special currency. Earlier this year, it failed to hold the low of the range in stage 4 (i.e., the price failed to support in the low area), which may be due to the overall sluggishness of the NFT market at that time.
Now, the NFT market is recovering. Opensea may launch its own token, and Magic Eden's token will also be launched next week.
Driven by these positive events, combined with the current market and chart performance, BLUR may regain market attention.
My main observation point is: when the price regains the low of the range (marked by the arrow on the chart), will there be an opportunity to build a position?
If the market falls again, you can also try to open a position at the low of the range in phase 3.
However, for me, this coin is more suitable for short-term trading rather than long-term holding.
3. $MEME
The investment cycle of the Meme theme is well known even to ordinary investors. It is hard for me to imagine that a token called "MEME" will not attract widespread attention from the market after it is listed on all top exchanges.
The price structure of this token is perfect and it is currently in phase 3. I will wait for the price to clearly break through and regain key positions before entering the market.
In addition, this token is also associated with a large NFT series. With the recovery of the NFT market, the implementation of the $ME incentive plan, and the potential launch of the Opensea token, it may bring further upward momentum.
4. $ORAI
$ORAI is a veteran AI token. Last week, it successfully recovered stage 4 (orange area) in the short-term market structure, so I bought some positions again.
If the price pulls back to this range again, I will continue to add to my position.
In addition, I have set a price alert, and when it breaks above the low of the macro range, it will become a new entry signal.
5. $TIA
I have been holding TIA since it reclaimed and retested the range low.
Currently, it is trying to break out of the current price structure. I think the subsequent pullback will be a good opportunity to add to the position if the price forms a clear breakout above the gray area.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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