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Shortly after the announcement of the Chinese government that the nation plans on taking a step forward towards blockchain technology adoption, the price of Bitcoin surged by nearly 30%. After falling down to its $7,400 price point and nearly forming a death cross according to technical analysis, which would result in a significant price correction, Bitcoin’s price suddenly surged to $10,000 on Friday.
The price corrected itself afterward and Bitcoin now hovers at around $9,300 at the time of writing and experiences high volatility. Although Bitcoin fell by a quite significant mark at the start of last week, as a result of Google’s quantum technology news, the sector’s most valuable asset quickly revitalized after President Xi Jinping revealed that China would place a strong focus on blockchain technology.
During his speech at the Politburo Committee session on the 24th of October, Xi promoted the integration of blockchain technology which would bring technological innovation and transform many industries and sectors.
‘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’ stated Xi. The news comes as a surprise given the fact that the central government issued a general ban on cryptocurrency-related businesses and exchanges in 2017.
Furthermore, the OTC trading market in China recently faced with a potential crackdown as companies such as Alipay denounce BTC OTC trading and consider it as a ‘gray ‘area’ regulation-wise. However, it seems that China is willing to be among the first global adopters of blockchain technology as the country is set to launch a national cryptocurrency soon. The central bank digital currency, issued by the People’s Bank of China, would essentially become the first state-supervised cryptocurrency in the world.
Besides the cryptocurrency sector, stocks of several blockchain companies experienced a massive surge on Monday. More interestingly, even equities that had minimal connections to the blockchain segment received a boost, including Beingmate (baby food producer) and Meitu (selfie app developer).
While China is set to adopt blockchain technology, president Xi Jinping made no mention of cryptocurrencies, which face regulatory scrutiny in the country. Despite a lack of optimism for the speculative sector, both Bitcoin and the altcoin market experienced a positive market trend.
Nevertheless, both cryptocurrencies and blockchain were heavily researched by Chinese internet users according to search engine data. On the 23rd of October, the terms ‘blockchain’ and ‘bitcoin’ were searched 777,000 and 572,000 times respectively and on the 25th of October, a day later after Xi’s announcement, the terms were searched 9,2 million and 1,3 million times respectively.
Now that the cryptocurrency market has been revived for at least some time, it seems that the chance that a bear market will be realized by the time Bitcoin’s reward halving occurs is slim. If more news of institutional adoption is revealed in the coming months, a bull market is likely to happen in 2020.