CFX Jumps on Renewed China Narrative, but Underlying Fundamentals Raise Concerns

Conflux’s CFX Rallies on China Buzz, But Underlying Network Activity Lags

Conflux’s CFX token surged 14% over the weekend, outperforming the broader crypto market and outpacing the CoinDesk 20 Index’s 4% gain. The rally has been fueled by renewed speculation that Beijing may be warming up to select digital assets — and that Conflux, with its China-focused architecture, stands to benefit.

Yet, beneath the surface, the story is less convincing.

Conflux has marketed itself as “China’s Ethereum,” operating as a regulatory-compliant ledger inside mainland China while simultaneously engaging with global crypto markets via the CFX token. The dual structure — likened by analysts to a “one country, two systems” framework — has enabled partnerships with Chinese tech platforms, including social media giants.

Amid talk that China may be exploring stablecoins to reduce reliance on the U.S. dollar, Conflux’s development of an offshore yuan-backed stablecoin has added to investor enthusiasm. The result: a 190% gain in CFX over the past 30 days.

However, the network’s on-chain fundamentals tell a more muted story.

Daily transaction volumes remain flat compared to last year, with no sustained growth trend, according to data from Conflux block explorers. Moreover, gas fee distribution is heavily concentrated: roughly 80% of all gas spent comes from just three wallets — raising concerns about decentralization and organic network usage. By comparison, Ethereum’s top gas spender accounts for less than 10% of total activity.

While mainland China hasn’t explicitly banned crypto and Hong Kong’s regulatory support continues to serve as a strategic testing ground, the market’s exuberance around Conflux may be premature. Hong Kong’s crypto push is reminiscent of how it led the way for mainland stock markets in the 1990s, but it remains unclear whether Conflux is the best proxy for this macro narrative.

Despite the bullish momentum in price, on-chain data suggests the fundamentals have yet to catch up.