President Xi’s blockchain comments push Bitcoin price higher
Bitcoin was up over the weekend, increasing its market cap by AUD 55 billion on comments from Chinese President Xi.
The move was prompted by the Chinese President Xi making comments that China must ‘… seize the opportunity for blockchain technology…we must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.’
- Bitcoin market cap increased by $55 billion AUD over the weekend
- The price moved after comments by President Xi on blockchain
- The market has perceived Xi’s comments as an about-face for China who banned all cryptocurrency and Initial Coin Offerings in 2017
- This comment comes in the late stages of US/China trade deal
- China is also close to releasing its digital Yuan, the first major central bank to do so – Allowing a digital market for their currency subject to global market forces could be considered a major step towards economic liberalisation
- This in contrast to the US, which is in the process of shutting down Facebook’s Libra project and with various Senators and the US Executive Branch members making opposing comments on Bitcoin and Cryptocurrency.
‘This unexpected validation of Blockchain by President Xi shows that world leaders are aware of the potential in digital assets. After this Chinese endorsement, the ball is in now in the court of the rest of the world to act definitively in the digital asset space.
One would fairly speculate on the lasting effects of President Xi’s comments putting a floor under the price of Bitcoin and other cryptocurrencies. We now wait to see the response from other key entities, especially the United States and central banks.’ said Grant Colthup from Mine Digital.
Other pertinent information
Major Illegal Use of USD stable coins – China is reported to be a major user of US ‘stable coins’ (cryptocurrency pegged to the value of the US Dollar) with reports of millions of USD stable coins used every day to transfer value across the China/Russia border.
Change in centrally planned approach to Finance – China’s centrally planned economy is part of one of the most structured governments in the world, but a digital currency and embrace of blockchain is an embrace of liberal ideas. (The creator of Bitcoin, Satoshi Nakamoto is quoted with ‘It’s very attractive to the libertarian viewpoint if we can explain it properly.’)
Capital Flight – China has had trouble controlling capital flight going back years and digital currencies have been a large part of that problem.
President Xi’s recent blockchain comment
‘We must take the blockchain as an important breakthrough for independent innovation of core technologies. [We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.’
Major countries are stepping up their efforts to plan the development of blockchain technology. Greater effort should be made to strengthen basic research and boost innovation capacity to help China gain an edge in the theoretical, innovative and industrial aspects of this emerging field.”
Previous comments – May 2018
“A new generation of technology represented by artificial intelligence, quantum information, mobile communications, internet of things and blockchain is accelerating breakthrough applications,”
“Since entering the 21st century, global science and technological innovation has entered into an unprecedented period of intensive activity,” Xi said in his speech. “A new round of scientific and industrial revolution is reconstructing the global innovation map and reshaping the global economic structure.”