There are signs that China’s cynical stance on cryptocurrencies could be changing after a major Chinese state-run media organisation labelled Bitcoin a “safe-haven asset”.
The Xinhua News Agency, a media organisation in which the Chinese Government has complete oversight of, has published a ‘Financial observation‘ analysing the recent Bitcoin price surge.
The analysis, published in Chinese, begins by warning readers about an increase in “short-selling power” after Bitcoin broke through the US$10,000 mark.
What then follows is essentially a pro-Bitcoin editorial – an extraordinarily rare sight in any Chinese media.
“Bitcoin has shown the characteristics of safe-haven assets and attracted many investors’ attention,” writes analyst Yang Chenglin.
“In addition, Facebook’s proposed release of the cryptocurrency Libra has greatly increased the market’s popularity and attracted more investors into the cryptocurrency market.”
The stunning analysis then goes on to compare Bitcoin with Microsoft.
“As of the 25th, the global market value of the global Bitcoin market was only $209.5 billion, less than one-fifth of Microsoft’s market capitalisation.
“Bitcoin has a good chance to be widely used in the future, but it is still a growing ‘grassroots experiment’.”
China’s history of crypto bans
Trading cryptocurrencies or organising Initial Coin Offerings is illegal in China, however, residents are allowed to own and hold crypto.
China also has a history of proposing cryptocurrency mining bans with multiple senior government figures condemning the activity over the past few years.
Regardless, it is estimated that around 70% of global Bitcoin mining takes place on Chinese soil.