China’s President Makes Major Push for Blockchain, Bitcoin Price Jumps

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Linas Kmieliauskas

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Linas Kmieliauskas

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October 23, 2023 09:42 EDT

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China’s President Xi Jinping urged the country to accelerate the development of blockchain technology due to its importance “in the new round of technological innovation and industrial transformation” of China. (Updated at 16:43 UTC: Updates in bold).

Source: iStock/ilbusca

The President was speaking at a group study session of the Communist Party of China Central Committee Political Bureau on the development of blockchain, Xinhua reported.

Meanwhile, following the news, bitcoin (BTC) price rallied around 10%. However, not everyone agrees that this move was fueled by the statement of Xi Jinping. At pixel time (16:39 UTC), bitcoin trades at c. USD 8,343 and is up by more than 11% in the past 24 hours and by 5% in the past week. Other major coins also jumped by 4%-20% in a day, while the total market capitalization increased by almost 11%, to USD 230.9 billion.

BTC price chart:

Source: coinpaprika.com

4/ President Xi: 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

— cnLedger (@cnLedger) October 25, 2019

“Now that’s pretty big!! Seeing China fully embrace blockchain technology in such a public way is great for the entire crypto industry, which in turn is great for Bitcoin,” according to Mati Greenspan, Senior Market Analyst at eToro.

“This will be the space race of our generation. America has to embrace the technology, including Bitcoin, or we risk being left behind,” Morgan Creek Digital co-founder Anthony Pompliano reacted on twitter.

Gabor Gurbacs, Director of Digital Asset Strategy at an investment management firm VanEck, added: “That’s the right response from a superpower to any promising technology.”

In this context, it’ll likely be a (semi-)permissioned distributed network to facilitate financial transactions with the ultimate goal of close to instantaneous(t+0) settlement. Likely not trust-minimized/permission-less like Bitcoin. But may open up gates to build on Bitcoin.

— Gabor Gurbacs (@gaborgurbacs) October 25, 2019

As previously reported, China is expected to launch their digital renminbi soon, which might “re-wire [much of the world].”

Meanwhile, in May, Xi Jinping said that the country needed to “build a powerful world of science and technology more than any other time in history,” and made specific mention of blockchain technology.

The announcement today comes hot on the heels of recent claims that the U.S. could face security risks if it continues to shirk away from public spending on innovation. For example, Mike Brown, the director of the Pentagon’s Defense Innovation Unit, a branch of the Defense Department, identified 16 technology categories – including cryptocurrency – where China is currently ahead of the United States.

Moreover, in an attempt to defend their Libra project, Facebook’s CEO Mark Zuckerberg, told the U.S. lawmakers that “China is moving quickly to launch similar ideas in the coming months. Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.”
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Reactions on the bitcoin rally:

+12% rally in #Bitcoin coinciding with strong equity day as S&P 500 nearing all-time highs…

– a reminder of the 'unpopular' opinion that the bitcoin performs best when S&P 500 rallies.

– best years Bitcoin when S&P 500 return >15%.$BTC mostly retail, thus, mostly 'risk-on'

— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) October 25, 2019

If you ask: "why $1k candle in an hour?"

I like @IamNomad thread earlier:

•Could be news->Xi talking blockchain
•Could be technical->buyers take control at support

The "why" of a market move is always going to be a combination of many factors & partly unknowable.

— Luke Martin (@VentureCoinist) October 25, 2019

also the time divergence indicates LOCAL CHINESE TRADERS WERE INDIFFERENT TO THE XI’s news …

if non-Chinese traders saw the news when they woke up today and pumped it, it’s def an over-read to me

Or it’s just long/short ratio is off and now it’s the time to roast the 🐻?

— Dovey "Rug the fiat" Wan (hiring) (@DoveyWan) October 25, 2019