Following Chinese President Xi Jinping’s statement that gave credibility to block-chain and crypto-currency, revealing the reasons the Chinese need to accelerate the adoption of block-chain, this has given bitcoin an edge in the country.
The magical recommendation as made by the world’s second-biggest economy to accelerate the development of block-chain technology, bitcoin regained lost ground on a nearly one month long slump.
Block-chain is a decentralized, distributed, and oftentimes public, digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of subsequent block.
According to Xi, “Block-chain, a digital ledger that forms the backbone of many crypto-currencies such as bitcoin, should be the core of innovation in China”.
Bitcoin: BTC=BTSP surged 24% between Friday and Saturday after Xi’s comments, touching $10,350 in its biggest two-day jump since the height of its retail-driven bubble in December 2017. Other major crypto-currencies including ethereum: ETH=BTSP and Ripple’s XRP: XRP=BTSP also rose wonderfully.
Meanwhile, in early London trading, bitcoin – the largest cryptocurrency by market capitalization – was down 1.6% at $9,403.
Crypto-currency Traders’ Point Of View
Following the sparkling comments by Xi that rewired the intense interest of many Chinese in the crypto trading; many outstanding leading leaders of cryptocurrency have been airing their views on the impact of President Xi’s comments.
A Chinese buyer revealed that the cryptocurrency exchanges are banned in China; however, its trading is still popular at over-the-counter venues, and Chinese buyers account for major volumes on platforms elsewhere.
Another heavy backup view for the soaring of bitcoin, an email by Andy Cheung, head of operations of OKEx, a Malta-based exchange popular among Chinese read:
“The positive comments from the Chinese leader will continue to support the broader crypto prices to maintain at current levels, as China remains a major player when it comes to global crypto trading”.
Anthony Wong of Hong Kong-based crypto investment firm Orichal Partners said, “There have definitely been more conversations since the weekend.”
Michael Novogratz, founder at crypto investment bank Galaxy Digital and a major Bitcoin (BTC) bull also claimed that the Chinese president’s announcement in late October triggered the recent surge in Bitcoin’s price.
By urging China to embrace blockchain technology for the sake of the country, Xi “just credentialized crypto and blockchain,” Novogratz stated.
The China-based Google searches for bitcoin and blockchain also spiked after Xi’s comments, suggesting that the remarks had aroused intense interest in cryptocurrencies.
Amid the comments, cryptocurrency trading is still formally banned in China; the Standing Committee of the 13th National People’s Congress in China passed a new “crypto law” on Oct. 26 that will take effect on Jan. 1, 2020. The new legislation stipulates new standards for the application of cryptography and the management of passwords in the country and implicitly relates to cryptocurrency regulations.
An exec at the Chinese economics think tank has predicted that China’s central bank will be the first to launch a digital currency successfully.
Bitcoin prices have fallen in recent months as politicians and regulators across the world have condemned Facebook’s planned Libra cryptocurrency. It lost a third since it touched its highest this year in June believing that Libra would hasten the mainstream acceptance of virtual coins.