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Xi Blockchain Endorsement Triggered Buying Frenzy in Chinese Cryptocurrencies

  • Chinese President Xi Jinping announced support for blockchain last Thursday.
  • The news was welcomed by the crypto community as Chinese altcoins such as NEO, TRON and Qtum skyrocketed over the weekend.
  • Analysts believe that there’s more to the hype and speculation that powered the move of Chinese coins in their USD and BTC pairs.

Chinese President Xi Jinping announced on Thursday that his country should “take the leading position in the emerging field of blockchain,” according to a roughly translated Xinhuanet report. A couple of days after the announcement that was warmly received by the crypto community, the country passed a cryptography law in preparation for the release of China’s own digital currency. The moves by the Chinese Communist Party (CCP) were so quick that market participants took a day or two to digest the news.

The Chinese government wasting no time moving into the blockchain space. | Source: Twitter

Chinese Altcoins Pumped Liked Crazy After CCP Embraced Blockchain

It took some time before the market understood the gravity of China’s latest moves. On Sunday, leading Chinese cryptocurrencies posted solid gains in both U.S. and BTC pairs. The rally lasted until early morning Monday in Beijing before profit-taking ensued.

For instance, the Chinese Ethereum killer NEO surged as it climbed as high as $13.45 Monday and posted an increase of over 46% in two days against the U.S. Dollar. NEO also performed very well against bitcoin, climbing by almost 40% in 48 hours. The price retraced over the last 14 hours but it’s still up over 20% since Oct. 26.

NEO came to life against bitcoin over the last two days. | Source: TradingView

It’s the same story for Qtum (Quantum), the China-based blockchain project that also competes in the smart contract arena. In its USD base pair, the cryptocurrency skyrocketed by almost 50% in a couple of days. Against bitcoin, Qtum grew by more than 40% in the same time period.

Qtum bulls found a catalyst to finally flex their muscles. | Source: TradingView

TRON (TRX) followed suit. The Justin Sun-led decentralized platform rose by over 30% against the U.S. Dollar in the last two days before the rally faded. In its BTC base pair, the cryptocurrency ascended by nearly 30%.

TRON breaking out after CCP’s announcements. | Source: TradingView

Other Chinese coins also performed well in their BTC base pairs. For example, Ontology (ONT/BTC) ripped by almost 70% on Oct. 27 alone. In addition, Nebulas (NAS/BTC) increased by over 56% the same day. Lastly, HyperCash (HC/BTC) grew by over 37% between Oct. 27-28.

Top Economist: The Rise of Chinese Altcoins Is Not Just Pure Hype

Many are saying that the renaissance of Chinese cryptocurrencies over the last few days is nothing but speculation brought about by hype. For instance, the widely-followed trader Jacob Canfield believes that speculation on Chinese coins is in full effect.

Jacob Canfield sees speculation in play. | Source: Twitter

However, economist and trader Alex Kruger disagrees. In a tweetstorm on the day these altcoins flew, the economist noted that the resurgence of Chinese altcoins is not based on hype alone.

Alex Kruger doesn’t see hype as the only catalyst of the recent rally. | Source: Twitter

Mati Greenspan, senior market analyst at eToro, shares Mr. Kruger’s sentiments. He told CCN,

Yes, the excitement is definitely warranted. The President of China just said he wants to embrace blockchain. These are the leading Chinese compliant blockchains right now.

It appears that these Chinese cryptocurrencies can potentially lead the altcoin market out of bear territory. Should that happen, we have the CCP to be thankful for.

This article was edited by Sam Bourgi.