The past few days have been quite successful for the entire crypto industry. After a long period of consolidation below the $ 8000 mark, Bitcoin managed to secure enough support from buyers and revisited its psychological resistance at $ 10,000. Although the bulls have failed to hold above this barrier, the very fact that it took Bitcoin only three days to rise by 25% attracts more hopeful optimists to the market, flocking in expectations of another BTC “mooning”. It is worth noting that this time the Bitcoin (BTC/USD) rally relies on a very specific fundamental factor, namely the unexpected change in China's position regarding the blockchain industry.
Speaking at the 18th collective study of the Political Bureau of the Central Committee, President of the People’s Republic of China and General Secretary of the Communist Party of China Xi Jinping said the country needs to consider the applications of blockchain technology to support innovation of “core technologies”.
Jinping highlighted the necessity to integrate blockchain not only in the real economy itself but also in related technologies: artificial intelligence and big data. Following Jinping’s speech, the Standing Committee of the All-China Assembly of People’s Representatives (NPC) passed the first cryptography law in the country's history. The document standardizes cryptographic applications and the cryptographic keys management process. The cryptography law will become effective on January 1, 2020. Experts believe that the adoption of this law is an obvious prerequisite to the launch of the country’s own sovereign digital currency by the People's Bank of China in the near future.
It is worth noting that the market reaction to Xi Jinping’s speech in support of blockchain technology followed almost immediately. And it’s not only about the growth of capitalization. After Xi Jinping’s speech, the number of WeChat searches for “Bitcoin” has more than doubled. At the same time, the number of requests for the word "blockchain" increased by almost 12 times. Moreover, the shares of leading blockchain companies in China rose by an average of 10% amid expectations of capital inflow into the crypto sector.
The main conclusion to draw from Xi Jinping’s speech is that cryptocurrency legislation in China will be implemented in China as soon as next year, and transactions with digital assets will seize to be something frowned upon and will become completely legal. The change in Beijing’s stance has not only inspired traders but also significantly improved Bitcoin’s positions. Market participants are hopeful that progressive China would set an example for other countries and regulators. In other words, Bitcoin, which is still heavily criticized by most state institutions, is becoming an increasingly transparent and reliable asset in the financial markets and may finally prove itself as a worthy competitor to traditional payment methods.
Apparently, interest in the Bitcoin industry in the coming 2020 will only increase. If China's position remains unchanged, BTC will have good chances to reach new local highs and hold above $ 15,000. This scenario will be facilitated by investors themselves. They haven’t received good news from the regulatory sphere for a long time, and this may be their chance to celebrate.
