Flagship cryptocurrency Bitcoin has seen its price rise close to 40% in less than 24 hours in an impressive return for the gutters following this week’s dump that was precipitated by the disappointing Congressional testimony of Facebook CEO Mark Zuckerberg on Wednesday.
According to data provided by Luxemburg-based cryptocurrency exchange Bitstamp, the price of Bitcoin rose from a low of about $7,460 to breach the psychological barrier of $10,000, zipping through it and posting an intraday high of $10,350 at 1 AM UTC. Much of the gains were realized in two price spikes the first starting at 3 PM UTC that saw the value of the asset rise by 11% in under an hour. The second rally began late into the night at 12 AM and lasted two hours and seeing bitcoin gain about $1,750 which represents an impressive 20%.
The bitcoin market and by extension the entire cryptocurrency market is mainly affected by market sentiments and news rather than fundamentals. In our previous report on the price drop this week when Bitcoin shed close to 10% in less than a day, we attributed the fall to the news from Congress. Our argument was that as positive as the news about the announcement of the Facebook Libra was, so was the negative impact on the evident lack of support from Congress after the testimony by the CEO of the leading company behind the project.
So what may have caused the quick turnaround of Bitcoin only hours after it fell to 5-month lows? Expectedly, bitcoin was again reacting to positive news affecting the industry. President Xi Jinping of the People‘s Republic of China made a serious wink towards blockchain on Friday morning.
During a meeting with the Political Bureau of the Central Committee, Jinping emphasized the use of blockchain as an important breakthrough for independent innovation of core technologies and accelerated the development of blockchain technology and industrial innovation. He went as far as saying that China will be looking to position itself at the forefront of the blockchain revolution.
This can only be translated as to mean one thing – more demand for bitcoin. trading of bitcoin and other cryptocurrencies was banned in China by the country’s central bank back in 2017 and ever since the future of cryptocurrencies had been put into limbo at least in the country.
With the pronouncement of the president that the state would be taking a new stance on the use of blockchain, this is good news not just for the industry but also for every major coin. China is a leading economy and player in the bitcoin network contributing a majority of the global bitcoin mining hash rate.
Since breaching the $10,000 price point, bitcoin has since retraced back below it and is currently trading at sub $9,500 levels.