Last week, China's President Xi Jinping said China should hasten the development of blockchain technology and take a leading position in this nascent field. This drove blockchain-related stocks upwards on Monday.
Shenzhen Xunlei Networking Technologies is one of the companies, that sells cloud downloading services and is heavily invested in blockchain, which saw it's stock market cap doubling over the night. This huge surge was the highest daily rise since the company's listing on Nasdaq in 2014.
Dozens of Chinese blockchain-related companies listed on the A-share market maxed out their 10 percent daily limit on Monday. It has been expected that more capital flowing into the sector is to follow.
More Gains Coming Soon
Bitcoin price, meanwhile soared 42% last week, going as high as $10,600. At the time of writing, BTC has been trading at $9,383 with a 24 hours loss of 2.78%, as per Coincodex.
An explosion of interest in blockchain and bitcoin is also seen in search data on Baidu and WeChat, with investors correlating the price rise in the flagship cryptocurrency with this surge in interest.
as expected, almost ALL (over 100) Blockchain-related Chinese A-shares hit the daily upper limit (10% intraday gain)
New money in China will first hit the stock to follow on the Xi/Blockchain news, and later ______ pic.twitter.com/sC5IZgAojo
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) October 28, 2019
This hike in stock market prices is also expected to be seen in cryptos in the coming days, projects Changpeng Zhao, the CEO of the world’s leading cryptocurrency exchange, Binance.
“Those gains in stock markets will spill over to crypto soon… Told ours guys to scale up system capacity, waiting,”
Chinese altcoins like NEO, Tron, Qtum, and Ontology among others have been recording as much as 50% gains but have today dropped drastically, as much as 12%.
But as CZ and Wan have noted, if the capital flow moves in the crypto market in the coming days, we might see a new 2019 high for BTC and a movement in altcoins.
Today, Wan also reported another development, China Merchant Bank investing in BitPie, a Bitcoin wallet with “longest history and most users back in China.”
“All I can say is this to me it's a sign of beginning of the nationalization of Bitcoin / Cryptocurrency related infra in mainland,”
In other news, the head of the technology department at the People's Bank of China, Li Wei urged commercial banks to ramp up their application of blockchain and embrace digital finance.