• In a 60-minute speech, President Xi Jingping described cryptocurrencies as fraud and market manipulation.
• Xi again illustrates that China sees great potential in blockchain technology and not in Bitcoin and other cryptocurrencies.

Bitcoin’s price has fallen below the support level of 8,400 USD and shows a further downward trend in the last 24 hours (- 3.76%) and stands at the time of writing at a price of 8,135.87 USD. The hyped news from China was dampened yesterday as President Xi took a stand on Bitcoin and blockchain technology in a new speech.

“Cryptocurrencies are fraud and market manipulation.

As we have already reported, positive news from China has been overzealously or misinterpreted. A big hype has arisen about past opinions of President Xi which are supposed to be interpreted as positive. Yesterday, Xi gave a 60-minute speech that was broadcast on state television on CCTV1.

In it, he sharply criticizes cryptocurrencies and emphasizes once again that China will push ahead with the adaptation and development of blockchain technology. Dovey Wan, founding member of the blockchain company PrimitiveCrypto, summarizes that cryptocurrencies were described as “illegal fraud and market manipulation” of the market.

Finally, the Chinese state medium Xinhuan titled that “Bitcoin is the most successful application of blockchain technology” and pointed out the advantages and disadvantages of the cryptocurrency (freely translated):

First of all, Bitcoin is not a tangible currency. It is produced and operated on the Internet … [Unlike] banknotes [which are]supported by national laws and sovereign credit, Bitcoin is completely born in the modern technology Internet era.

In summary, it can be stated that Bitcoin was not presented as a scam, but that Xi once again places the blockchain at the centre of the further development work of the Chinese governments. Most recently, China has expanded the pilot programme for its cross-border Blockchain work. The project is supervised by the Chinese State Administration of Foreign Exchange (SAFE).

Last month, the work was expanded from 9 to 23 provinces and more than 6,300 transactions and loans worth USD 6.8 billion were granted to a customer base of over 1,200 companies via the designed platform.

Will the digital yuan affect Bitcoin’s price?

The launch of the digital yuan is expected in the next 2 to 3 months and will replace cash in China in the long term. At the beginning it will coexist with the Yuan and then be gradually abolished. Initially, companies with large amounts of capital will benefit from faster and cheaper transaction fees and times.

China’s population continues to grow to over 1.4 billion people, making it one of the world’s largest markets. Should China move to legalize cryptocurrencies like Bitcoin again and open trading, this could have a positive influence on the price of Bitcoin. So far, a large part of the hash power of the Bitcoin network comes from China.

The mining of Bitcoin should not be abolished. In addition, the new “Crypto Law” will come into force on January 1, 2020, which is intended to regulate all legal issues in the blockchain and fintech sector. It remains to be seen what direct and indirect impact the launch of the digital yuan will have on the global economy and the cryptocurrency market.

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