Bitcoin’s price rose sharply over the weekend, recovering from a plunge just days earlier, after Chinese President Xi Jinping gave a speech embracing blockchain technology and calling on his country to advance development in the field.
The value of the world’s best-known cryptocurrency jumped as high as $10,332 on Saturday, according to data from industry website CoinDesk. The price has since eased to around $9,370 as of Monday morning, up about 1% on the day.
The virtual currency’s jump came as China’s leader sang the praises of blockchain, the technology that underpins cryptocurrencies like bitcoin. According to state media, Xi said Friday that China has a strong foundation and should look to take a leading position in the sector.
He reportedly said China should “seize the opportunity” offered by blockchain, adding the technology could benefit a range of industries including finance, education and health care. A blockchain is a digital ledger that maintains a record of transactions or other data across a network of computers.
Beijing has taken a tough stance on cryptocurrencies, banning a fundraising exercise known as an initial coin offering and forcing local trading platforms to shut down in 2017.
China’s central bank, the People’s Bank of China (PBOC), has been working on its own digital currency. It has accelerated its development in recent months as Facebook and a handful of other companies look to shake up the global financial services industry with a cryptocurrency called libra.
The PBOC set up a research team back in 2014 to explore the use of virtual currencies to reduce the costs involved in circulating traditional paper-based money. A senior official at the bank said last month that the planned digital token would bear some similarities to libra.
Libra has come under intense scrutiny from regulators around the world, who worry Facebook’s proposed digital asset would disrupt the financial system and could be open to risks like money laundering and terrorist financing.
Lawmakers last week grilled Facebook CEO Mark Zuckerberg over the project. Zuckerberg at one point said the social network would not take part in launching libra “until U.S. regulators approve.”
Though Facebook has led the initiative so far, the tech giant has been trying to keep a distance between it and the Switzerland-based Libra Association that oversees the currency’s development. The consortium lost key initial supporters including Mastercard and Visa earlier this month, leaving it with just 21 founding members.
Bitcoin has been on the rise this year and is currently up nearly 150% year-to-date. That marks a significant turnaround from last year, when the digital coin tanked to as low as $3,122 after hitting an all-time high of close to $20,000 in December 2017.
Analysts had attributed some of the cryptocurrency’s 2019 gains to headlines around companies like Facebook, Fidelity and New York Stock Exchange owner Intercontinental Exchange getting involved in the space, the logic being that it brings some much-needed legitimacy to an industry that has in the past been clouded by major cyberattacks and scams.