In an interesting development, the Chinese state-run media CCTV has publicly acknowledged Bitcoin’s “outshining” of Gold. Well, this has led to a renewed optimism about what if Beijing starts investing heavily in the world’s largest cryptocurrency.
We all know how Chinese investors contributed to massive BTC trading volumes just before the regulators banned Bitcoin in September 2017. Interestingly, during its recent public broadcast, CCTV noted that Bitcoin could be a safer store-of-value than Gold.
It also added that the surge in Bitcoin investments can put downward pressure on Gold. The state-run-media also added that Bitcoin (BTC) has just started to “outshine” gold. Speaking about this recent development with Express UK, Bitcoin evangelist Max Keiser said:
“When China enters the global Hash Race to secure as many bitcoin as possible the price will instantly trade in the 6-figures”.
Analysts have already started hinting that any positive stand by China can lead to a huge bull market. Moreover, they have already started speculating about how this could affect the gold price in the long term. In a report published last week, banking giant JPMorgan already spotted a recent trend of money coming out of Gold ETFs and entering Bitcoin (BTC). JPMorgan also noted that if the trend continues, Gold can suffer for years because of Bitcoin.
China Is Not Willing To Miss Out On Institutional Adoption of Bitcoin
Let’s look a bit into what must have forced China to tilt towards a pro-Bitcoin stand. In recent months, Bitcoin has attracted massive sums of institutional money. As per the latest report, a majority of this money is from financial institutions of North America.
On one hand, China is trying to decouple itself from the USD dominance in trade and has been aggressively working on its CBDC – Digital Yuan. However, this is a long-term game for Digital Yuan to expand its footprint in the global market.
On the other hand, global economic conditions and inflation-surge is pushing institutions to bet on Bitcoin as a safe hedge. Analysts are already giving six-figure targets for Bitcoin (BTC) in 2021. China doesn’t seem to be willing to miss out on this opportunity. It is very much possible that China might yet again legalize for its financial firms to buy Bitcoin.
If at all, China legalizes Bitcoin again, it can reach the $100,000 milestone faster-than-expected. It will be thus interesting to see further developments in the space.
