China’s 2019 Blockchain Endorsement

“On October 28, 2019, Bitcoin surged 26% over a few days, briefly topping $10,000, after Chinese President Xi Jinping publicly endorsed blockchain technology, as reported by Bloomberg and Business Insider. The rally, which pushed Bitcoin to $9,934 and lifted the Bloomberg Galaxy Crypto Index to a five-week high, was sparked by China’s push to invest in blockchain for industrial and financial applications, contrasting with its earlier crypto bans. Ethereum also rose, climbing 10% to around $185, as investors anticipated broader blockchain adoption.

The Endorsement: China’s Blockchain Bullishness

On October 24, 2019, President Xi Jinping, speaking to Communist Party officials, called for increased investment in blockchain to secure a competitive “edge” over other nations, according to China’s state-run Xinhua news agency. Xi emphasized blockchain’s role in driving “technological innovation and industrial transformation,” urging integration with AI, big data, and IoT. Days later, Li Wei, head of the People’s Bank of China’s technology department, echoed this at a Shanghai forum, urging commercial banks to adopt blockchain for risk control and to ease lending for small businesses, per Reuters.

The endorsement marked a shift from China’s 2017 and 2021 cryptocurrency exchange bans, which had crashed Bitcoin prices. While Xi’s remarks focused on permissioned blockchains for enterprise use, not decentralized cryptocurrencies, investors interpreted the news as a softening stance on crypto-related technologies. This optimism was amplified by China’s “Tech Cold War” rivalry with the U.S., where President Trump had recently criticized Bitcoin, and by Mark Zuckerberg’s warning that U.S. resistance to crypto could cede financial dominance to China.

Market Impact: Bitcoin and Ethereum Soar

Bitcoin jumped 9.9% on October 28 to $9,424, per Bloomberg’s consolidated pricing, after climbing 26% since October 24, briefly crossing $10,000 for the first time in over a month. Ethereum gained 10%, reaching around $185, while the Bloomberg Galaxy Crypto Index, tracking major cryptocurrencies, hit a five-week high. The total crypto market capitalization, around $250 billion, saw renewed momentum after months of stagnation following Trump’s July 2019 crypto criticism and the Bitfinex-Tether scandal.

The rally was driven by speculative fervor, as investors bet on China’s blockchain push spilling over into crypto markets. Blockchain-related stocks in Shanghai and Shenzhen, including loosely connected firms like Meitu Inc. and Beingmate Co., surged by their daily limits, while Hong Kong’s BC Technology Group, a crypto exchange operator, soared. The enthusiasm reflected China’s influence as a former crypto trading hub, despite its exchange bans, and revived hopes of relaxed regulations, boosting retail and institutional interest.

Why It Mattered: A Shift in Sentiment and Strategy

China’s 2019 blockchain endorsement was significant for several reasons. First, it signaled a strategic pivot. After banning crypto exchanges to curb capital flight and speculation, China embraced blockchain for state-controlled applications, like supply chain and digital finance, aiming to lead in a key emerging technology. This contrasted with its earlier crackdowns and positioned China against the U.S., where regulatory skepticism, exemplified by Trump’s remarks, slowed crypto adoption.

Second, the endorsement reshaped market sentiment. Xi’s high-profile support countered negative narratives from regulatory crackdowns and fraud scandals, reigniting bullish momentum. The rally, though speculative, showed crypto’s sensitivity to policy shifts in major economies, especially China, which had historically driven price swings with its 2017 and 2018 bans.

Third, it highlighted blockchain’s broader potential. Xi’s call for integration with AI and IoT underscored blockchain’s utility beyond cryptocurrencies, boosting investor confidence in related assets like Ethereum, a backbone for DeFi and smart contracts. The surge in blockchain stocks, even those with tenuous connections, reflected a speculative bubble but also genuine excitement for the technology’s industrial applications.

Long-Term Implications: Blockchain’s Rise, Crypto’s Resilience

China’s blockchain push had lasting effects. The country accelerated development of its digital yuan, launched in pilot phases by 2020, leveraging blockchain for a state-controlled alternative to decentralized crypto. Blockchain adoption grew in Chinese industries, from supply chains to banking, solidifying China’s tech ambitions. While crypto trading remained banned, the 2019 endorsement fueled global interest in blockchain, indirectly supporting Bitcoin and Ethereum’s recovery, with Bitcoin hitting $69,000 and Ethereum exceeding $4,000 by 2021.

The rally catalyzed further institutional engagement. Exchanges like Coinbase capitalized on renewed enthusiasm, while the U.S. later approved Bitcoin ETFs in 2021 and 2024, reflecting a catch-up with China’s blockchain momentum. Ethereum benefited from growing DeFi and NFT ecosystems, cementing its role in blockchain innovation. The event also spurred regulatory debates, with countries balancing blockchain’s potential against crypto’s risks, leading to clearer frameworks in places like Singapore and Canada.

Conclusion: A Chinese Boost for Crypto’s Comeback

China’s 2019 blockchain endorsement, led by Xi Jinping’s call for investment, sparked a 26% Bitcoin rally and a 10% Ethereum surge, breaking a period of market malaise. By signaling state support for blockchain, China reignited investor optimism, countering global regulatory headwinds and highlighting the technology’s transformative potential. For crypto enthusiasts and investors, the event remains a landmark moment, illustrating how policy shifts in a tech powerhouse can drive markets and pave the way for blockchain’s mainstream ascent.”