This past weekend, the price of bitcoin rose sharply due in part to a speech given by Chinese President Xi Jinping. In his speech, he stated that he believed that China should seek more opportunities related to blockchain. President Xi went on to state that China would like to become a world leader in the cryptocurrency sector. He went on to make remarks stating that blockchain technology could help several different industries in China including the finance and healthcare sectors.
Cryptocurrency investors know that the Chinese government has taken a mixed stance on the subject of cryptocurrency. There are currently no cryptocurrencies allowed to be used within China. China does not allow initial coin offerings. In 2017, the government stopped trading and shutdown a cryptocurrency trading platform.
While all this has happened, the People’s Bank of China has researched the development of its own type of digital currency. There is speculation that the bank wants to develop a currency similar to Libra being developed by Facebook.
While President Xi’s comments sent the cryptocurrency market higher, the Chinese state media tempered President’ Xi’s remarks the next day. They sought to emphasize that President Xi was not endorsing cryptocurrency. The state media also pointed out that the president had no plans to make cryptocurrency trading legal in China.
In spite of this clarification by the state media, several crypotucurrencies continue to trade higher. Bitcoin is having a good year on the market. Its price had increased over 150 percent on the year even before the rise that occurred as a result of the remarks by the Chinese president.
Much of the increase in cryptocurrency prices this year is due to the amount of media attention that has been paid to Facebook and Libra. There is an increase in investor interests. However, analysts warn that if there are continued problems with Facebook and Libra, there could be a backlash against cryptocurrencies.
