China has been in the news for the last few days, following a public endorsement of blockchain technology. Now, however, Chinese state media is urging investors to ”remain rational” as Bitcoin and other cryptos soar. Moreover, they are highlighting that Beijing’s approval of blockchain technology does not automatically translate to one for crypto.
China urges caution and rationality in the crypto markets
Last week, Chinese president Xi Jinping said that China should seek to dramatically accelerate the development of blockchain technology. This then led to significant price gains in the cryptocurrency markets in the following days.
Moreover, statements from a Chinese think tank executive then went on to fuel rumors that a Chinese CBDC is imminent. As such, the crypto sector saw a notable influx of interest as it seemed China was warming to it.
Now, however, it seems Chinese representatives are trying to quell these suspicions. Instead, Chinese state media is urging investors to remain ”rational”, rather than get caught up in a crypto-investment hype.
Specifically, Chinese news sources are suggesting that the regime’s newfound appetite for blockchain technology does not mean it is approving cryptocurrencies. The People’s Daily newspaper, which has close ties to China’s ruling Communist Party, reported the following:
”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.”
Chinese support for blockchain is not the same as support for crypto
Furthermore, the commentary also said that ”[b]lockchain’s future is here, but we must be rational”. As such, it seems that China is trying to minimize speculation in cryptocurrencies and other digital and virtual currencies.
One could view this as a counter-reaction to the last week’s surge in Bitcoin and crypto prices. China has, from time to time, been known to take an interest in the performance of the financial market in the country. Consequently, one could argue that they are now trying to slow down investments in the crypto market.
Furthermore, recent statement from Chinese traders lend even more credence to this theory. Traders at three different Chinese brokerages reportedly received a notice from the Shanghai Stock Exchange.
This statement said ”for any blockchain-related (topics), we ask listed companies to make statements based on facts and not make any exaggerated claims or create vicious hype”. It will, therefore, be interesting to see how this situation continues to evolve in the coming weeks.
Although China is urging caution, it is at the same time clear that the nation supports blockchain technology. With a looming Chinese CBDC, keeping an ear to the ground in relation to Chinese crypto sentiment may be more important than ever before.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.