Bitcoin has seen an absolute whirlwind of the past 48 hours. As you likely know, the leading cryptocurrency has traded within a massive $3,300 price range as crypto markets have incurred their latest bout of volatility after weeks of lull. At its local peak, Bitcoin was trading for $10,500; now, BTC is changing hands for $9,300.
Due to the absurd strength of this move, investors were quick to ask, “what the hell caused Bitcoin to shoot to the moon?”
The most obvious answer to this pressing question was President Xi Jinping’s endorsement of blockchain technologies.
On Friday, Oct. 25, Chinese state media outlets reported that President Xi called for the adoption of blockchain “as an important breakthrough for independent innovation of core technologies” in a meeting of the Political Bureau of the Chinese Communist Party’s Central Committee.
State-run outlet Xinhua revealed that Xi lauded the potential benefits of blockchain technologies in a swath of industries, including finance, education, health care, food security, and more.
Bitcoin rallied shortly after this story was released. But according to Dovey Wan, Primitive Ventures founding partner, it wasn’t Chinese traders reacting to this story that sent BTC rocketing higher.
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Bitcoin Boom Unlikely Caused by President Xi’s Love for Blockchain
Speaking to cryptocurrency television outlet BlockTV in a recent interview, Wan stated that her hypothesis is that it is western traders that drove “the majority of the Bitcoin price rally” from $7,300 to $10,600. She added that western traders overreacted to this news.
Backing her sentiment, Wan later remarked that Tether’s USDT has seen no premium on OTC markets in China, the price didn’t move immediately after the release of Xinhua’s aforementioned article, the price pumped as the U.S. woke up and shared President Xi Jinping’s statements, and the Bitcoin buying volume was not centralized on Huobi or OkEX.
Alex Krüger pointed out a statistic that may corroborate Wan’s analysis. The macroeconomy and crypto researcher noted that on Baidu — China’s equivalent of Google — searches for the Chinese equivalent of the term “blockchain” exploded and hit an all-time high as the trend for “Bitcoin” moved higher, but only marginally.
Interest in Bitcoin in China has barely edged up. Chart shows Baidu searches for Bitcoin (blue) vs Blockchain (red). Looks very conclusive to me, particularly so given the price spike. pic.twitter.com/UGwU5416jO
— Alex Krüger (@krugermacro) October 26, 2019
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