The
president of China, Xi Jinping, highlighted the potential of the blockchain,
the underlying technology of cryptocurrencies, driving the rise of the shares
of Chinese technology companies and the price of bitcoin, which briefly
exceeded USD 10,000 over the weekend past.
Xi said
China should accelerate investigations on blockchain, the open accounting
system that supports cryptocurrencies, according to a statement from the
official Xinhua news agency, last Friday, the 25th, after the local market had
closed. The Central Bank of China has been working on the development of its
own cryptocurrency.
Searches
for the term "blockchain" in Baidu, the most popular search page in
China, increased more than 40 times after President Xi's comments, according to
the portal's search results index.
Bitcoin,
the most popular cryptocurrency, registered an important bullish momentum. In
mid-afternoon on Monday in Beijing, BTC was trading at USD 9,500, after trading
around USD 7,500 before Xi's comments were made public. The price of bitcoin has doubled this year, but
remains below its historical high near USD 20,000, reached in December 2017.
Shares
of the Chinese software company listed in Nasdaq, Xunlei, which offers
blockchain-based services, increased 107% on Friday, its highest gain recorded
in one day, since it was made public in 2014.
An index
that tracks the price of 53 companies based in China, rose on Monday almost 9%.
The index, with a market capitalization of 822.6 billion yuan (USD 116.4
billion), has appreciated more than 60% this year, according to Wind.
"The
fact that China has raised this technology [associated with blockchains] to such
high levels is unprecedented", said Zhang Gang, the chief strategy officer
of China Securities, "This is a great boost towards market
confidence".
Several
companies that trade in South Korean exchange houses - an emporium for
cryptocurrency trading - also registered a boom in their market value.
Previously,
Beijing has been strict regarding cryptocurrencies. In 2017, the
government banned exchange houses and fundraising through initial coin
offerings (ICOs), which it called risky investments. Still, analysts have said that China has been
open to the benefits derived from the use of blockchains despite the attitude
towards cryptocurrencies, which has been very restrictive.
Many of
the companies that rose 10%, the maximum daily appreciation allowed on the
stock exchanges in China, have been involved in blockchains associated
businesses for a few years. Guangbo Group Stock, a commercial printing
company, acquired a cross-border payment company in 2016. Hundsun Technology, a software company
controlled by Alibaba, the Chinese Amazon, invested in a blockchain startup
called Symbiont in 2017.
The boom
on Monday had to do more with speculation than with growth expectations, since
very few companies in China have been able to monetize this technology
associated with cryptocurrencies, said Wang Rui, an analyst at Shanghai
Minority Asset Management, a copper fund with more than 10,000 million yuan
(USD 1.4 billion) in assets.
At the
time of the edition of this article, the price of BTC is USD 9,370, which
represents a 24% increase over last Friday 25, when the cryptocurrency
registered a pronounced boom.
SOURCE: Criptonoticias
