Chinese Praise for Bitcoin Strengthens Long-term Outlook

November 12, 2019
“The secret of success is to do the common thing uncommonly well”
― John D. Rockefeller Jr.

5-Day Change

  • Bitcoin: $8,683
  • Ethereum $184.9
  • Ripple $0.2707
  • Litecoin $60.95

Chinese State Media Praises Bitcoin Ahead of Digital Currency Launch

Bitcoin is all the rage...especially in China, where the state media just ran a front-page article as a homage to what it calls “the first successful implementation of blockchain technology.” China has been working hard on incorporating blockchain technology ever since the Chinese premier, Xi Jinping, called blockchain an innovative new technology.

So has China reversed course on Bitcoin? It seems like it! After removing a proposed mining ban, and giving heaping praise to Bitcoin’s features, it looks like China is warming up to the world’s top crypto.

What about the ban on trading? That’s still in place, though there are rumors that this article may be getting prepared to be lifted. But it’s only speculation, and there’s a good reason to think that China is just softening the ground for its own digital currency.

So is this good news for Bitcoin? Almost certainly. The article highlighted a lot of Bitcoin’s positive traits, and introducing Bitcoin to 1.4 billion Chinese citizens can hardly be called bad for awareness. Even if only a fraction of Chinese citizens choose to experiment with Bitcoin, that’s still a sizeable new userbase waiting in the wings. 

Wut We Think: Bitcoin, and crypto in general, still suffer from a lack of mass adoption. But a state-owned media outlet for the most populous country in the world speaking positively about it is absolutely an adoption driver. Expect Bitcoin to trend up in the short-term, especially on Baidu searches on the mainland.


Good News for Bitcoin Still Lagging in Bitcoin Price

Despite good news flowing into seems the price hasn’t entirely caught up yet. Bitcoin is still struggling to break out of the $9,000–$9,500 range it’s been in for the past two weeks. And it’s fallen even further, trading at around $8,743 at press time. But with enough time, the good news should be enough to break Bitcoin out of the doldrums.

What’s the good news? First up is China’s recent pivot on Bitcoin, and second is a major milestone – the Bakkt futures market has finally lived up to its promise, and trading volume on Bitcoin futures is exploding. Even the head of Facebook’s crypto projects says that Bitcoin functions the same way as gold.

Any bad news? On the technical side, it looks like Bitcoin bulls don’t have the momentum to keep the price steady at $9,000, much less rally it further, and the stage looks set for further drops below $8,600.

So what wins out? It’s hard to say precisely what investors and traders will believe and what they’ll discard – a report allegedly finding that the 2017 rally to $20,000 has been swept to the wayside, for example – but good news from China and Bakkt have similarly had little effect, though chances are it’s just a delayed reaction.

Wut We Think: Bitcoin is in for a rough few weeks to a month short-term, but on a longer three-month or quarterly scale, it’s hard to imagine that the current hype won’t turn into price gains. Even if Bitcoin never reaches the heights of $20,000, it’s too widely used, and with too much new technology, like the Lightning Network, to fall back to sub–$5,000 prices. What we’re seeing maybe Bitcoin stabilizing at a semi-organic price range.


Trading Spotlight: Hard Forks

Long-time crypto enthusiasts may have heard about terms like ‘hard fork’ and ‘soft fork’, and seen some of these forks result in entirely new cryptocurrencies. But forks can be a bit technical to understand, though the core concept is simple. Understanding what a fork is, and how it can affect a trader’s assets if crypto they hold is forking, can be crucial to taking advantage of this opportunity.

Hard Fork: A hard fork, as opposed to a soft fork, refers to the update to a cryptocurrency’s software – typically the mining or node software – that is no longer backward compatible. This means that transactions verified using the old software will no longer be considered valid by the new software, though the transaction history is maintained. Since transactions between versions are no longer compatible, one of them is now a ‘forked’ currency, which is completely separate from the original. Some examples are Bitcoin Cash and Ethereum Classic. For more information, check the Monfex Crypto Knowledgebase.

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