By
Steve Muchoki
April 19th, 2024
As Chinese President Xi Jinping highlighted the potential of blockchain, it positively influenced the stocks of Chinese tech companies.
Stocks in Chinese blockchain A-share companies “maxed out” to their 10% daily limit after a president Xi Jinping focused the attention of the public to the potential of the technology encouraging digital currencies, increasing the rise in related stocks and Bitcoin, which for the short time, though, went over $10,000.
Xi said China should hurry up with its research into blockchain, the open ledger system that cryptocurrencies rely on. China’s central bank has been developing its own digital currency.
Searches for the word “blockchain” on Chinese search engine Baidu rose more than 40 times in just two days after Xi’s comments and late on Friday, Bitcoin surged to hit $10,000 that presented 42 percent gain – the highest intraday gain since 2011. By Monday morning, it traded at about $9,370, and at the time of writing the price was $9,355. The price has more than doubled in 2019. However, it still hasn’t repeated a record hit in December 2017 when it was more than $20,000. The closest it came to this record was in June this year when it went over $13,000.
Be it as it may, shares of Nasdaq-listed Xunlei, a Chinese software company that offers blockchain-based services, rocketed by 107% on Friday, the largest single-day gain since the company went public in 2014.
On Monday the stock market rally was also reported by the Global Times, an English-language newspaper within the CPC-owned People’s Daily Group.
Also, the technology department chief at the People’s Bank of China (PBOC) Li Wei urged banks to build up their application of blockchain for digital finance products. Also, the 13th National People’s Congress in China (NPC) on Friday passed a cryptographic law whose purpose is making a friendly environment for the development of cryptography-based technologies.
The draft of the law says:
“Clear guidelines and regulations are needed to evaluate commercial cryptography technologies used in the major fields related to the national interest as the current ‘loose’ system is not suitable for the industry anymore.”
A huge increase of interest in Bitcoin, other digital currencies and blockchain could be seen in search data on WeChat, with investors connecting the top coin’s price lift with this surge in popular interest.
Co-founder of crypto investment holding firm Primitive Ventures, Dovey Wan tweeted a screenshot of the stock market boom in the domestic blockchain sector, saying that “as expected, almost ALL (over 100) blockchain-related Chinese A-shares hit the daily upper limit (10% intraday gain)”
as expected, almost ALL (over 100) Blockchain-related Chinese A-shares hit the daily upper limit (10% intraday gain)
New money in China will first hit the stock to follow on the Xi/Blockchain news, and later ______ pic.twitter.com/sC5IZgAojo
— Dovey "Rug The Fiat" Wan (@DoveyWan) October 28, 2019
At the same time, on global markets, Chinese technology companies such as the Shenzhen Xunlei Networking Technologies Co. jumped 107.76% to $4.82 – its highest daily rise since its listing in 2014.
Today, Oct. 28, Wan put the announcement:
China… China Merchant Bank just announced invested in BitPie, the Bitcoin wallet with longest history and most users back in China …
😳😳😳
Tho it's a non-custodial wallet there can be a non-zero chance ….[redacted] 🤐🤐🤐
— Dovey "Rug The Fiat" Wan (@DoveyWan) October 28, 2019
BitPie was at the times one of the most popular Bitcoin wallets with the biggest market share among Chinese users. This partnership, as well as other expansions such as the cryptographic law, could mean China finally accepts the bigger picture and the potential in Bitcoin. Let’s not forget that back in 2013, China forbid financial companies to hold or trade Bitcoin.
Let’s also mention that the “refugee” blockchain platform Tron (TRX), formerly under intense scrutiny from Beijing, rose almost 25% on the TRX/USD charts over the last 24 hours.
It will be interesting to see reactions from the United States since last week Facebook’s CEO warned them at this possible situation. He said that “China is moving quickly to launch a similar idea in the coming months”. He was obviously – more than right.