Crypto markets are up this week following an announcement last Friday from Chinese president Xi Jinping calling for further investment into blockchain technology.
Bitcoin (BTC) shot up by over 30 percent from $7,470 to a high of around $10,400 in the space of 24 hours late last Friday night. It has since settled to more modest levels around $9,200 but remains up by 13.25 percent over the past seven days. The majority of the top ten altcoins followed suit, with Bitcoin Cash (BCH) and EOS, in particular, both enjoying similar 14 to 15 percent gains.
The real gainers, however, are some smaller altcoins that have historically been popular amongst Chinese investors. Since this time last Monday, Ontology (ONT) is up 65 percent and Ethereum-challanger NEO is up by over 50 percent. Bitcoin SV (BSV) has enjoyed 30 percent gains and TRON (TRX) is up 20 percent.
President Xi Jinping’s Boost
As reported by Chinese state publication Xinhua, President Jinping lauded the benefits of blockchain technology at the 18th collective study of the Political Bureau of the Central Committee, saying:
“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.”
The announcement is surprising, considering an ongoing ban of cryptocurrency in the country that was implemented back in December 2013. Last year the country appeared to be even more focused on further restricting any crypto-related activity such as mining or trading. However, this year has brought a change of heart in the country, with both the Bank of China (BOC) and the China Construction Bank (CCB) recently turning their interests towards blockchain development.
Following President Xi Jinping’s announcement, a new cryptographic law was passed in the country by the leading party, The National People’s Congress. The new law will come into effect on January 1st, 2020, and provide a standardized method for businesses to manage passwords and cryptographic security.
Good for crypto?
The move, however, is not necessarily good for cryptocurrencies. Many see the new law as a way for China to take control of the local crypto industry by launching it’s own central bank digital currency, the Digital RMB. This may be an attempt to stem the flow of local Chinese currency into Bitcoin and other cryptocurrencies, something that has been on the increase lately as the U.S-China trade war intensifies.
However, the development has been particularly good for blockchain-related shares which shot up following the announcement. Interest in the Bitcoin futures trading instrument Bakkt, which has been disappointingly low since its launch a few weeks ago, suddenly surged on Friday. It hit a trading high of $10.3 million after spending most of the past few weeks trading below $1 million.
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