Beijing has told Bitcoin enthusiasts throughout the world not to get carried away over China’s apparent support for cryptocurrency.
Bitcoin went into overdrive last week after what was interpreted as an endorsement of crypto by China’s president – Xi Jinping – when addressing a meeting of the Chinese Communist Party’s Central Committee.
According to a Coin Rivet article for the Daily Express, he told members that blockchain technology was crucial for the country’s industrial ambitions and encouraged officials to concentrate on its development.
Blockchain is the technology that underpins cryptocurrency and, although it was born hand-in-hand with Bitcoin almost 11 years ago, scientists and academics the world over have been trying to separate blockchain as an industry in its own right for many years.
The connection between the two, however, is almost inseparable in many eyes. Which is why, when Xi Jinping cajoled China’s leading boffins to advance blockchain development, BTC markets flew into a frenzy.
Up until the end of last week, Bitcoin itself was hurtling towards a point in its value life cycle where it looked likely to stagger into an abyss after collapsing to around $7,300 and showing little sign of recovery.
The decade-old digital asset suddenly spiked on Friday as news of China’s apparent endorsement began to scuttle in every direction with excited whispers of one of cryptocurrency’s heaviest shackles being cast aside.
By Saturday evening, BTC had skyrocketed above $10,000 – driven by the sort of momentum that could have carried it back to the dizzying heights its legions of enthusiasts dream of.
After settling around $9,400, that enthusiasm still remains. What is missing now, though, is China’s support – something that, in many eyes, caused the weekend spike in price.
Chinese state media has been quick to clarify Xi Jinping’s remarks as a definite backing of blockchain technology – not cryptocurrency.
The People’s Daily – a Beijing-based news outlet – is this week carrying the rolling message that China’s support of blockchain should not be misinterpreted as support for cryptocurrency.
“Blockchain’s future is here but we must remain rational,” a leader article in the newspaper said.
“The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies.”
Cryptocurrency trading is still banned throughout China, despite noises from Beijing during much of 2019 that the secretive country has advanced plans to launch its own crypto coin in the coming months.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.