The bitcoin price has seen a crazy past 36 to 48 hours.
After tumbling to as low as $7,300 in the middle of last week bitcoin
shot up to over $10,000 on some exchanges overnight Friday and Saturday, for its biggest single-day rise since April 2, before falling again to around $9,000 according to Luxembourg-based exchange Bitstamp.
Bitcoin remains well off its 2019 high of $12,920 reached in June, though prices are still more than double where they started the year.
Other major cryptocurrencies such as ethereum, litecoin, Ripple’s XRP, and bitcoin cash rallied between 7% and 23%, adding billions to the value of the combined cryptocurrency market.
The number one cryptocurrency by market value jumped to $10,350 on Friday the highest level since Sept. 24 according to Bitstamp data.
Meanwhile, the global average price, as calculated by CoinDesk’s Bitcoin Price Index, clocked a high of $10,332.
The rise from lows below $7,400 to highs above $10,300 is reportedly the third-largest 24-hour price gain in bitcoin’s history.
Many bitcoin and cryptocurrency market analysts pointed to comments made by China’s president President Xi Jinping that the country should “seize the opportunity” of bitcoin’s blockchain technology as the reason behind bitcoin’s sudden rally, according to Coindesk citing China’s Xinhua news agency.
China banned bitcoin and cryptocurrency exchanges in 2017 and some took Xi’s blockchain comments on Friday as a sign the country could ease bitcoin and crypto restrictions.
“We must take the blockchain as an important breakthrough for independent innovation of core technologies,” Xi reportedly said, speaking at the 18th collective study of the Political Bureau of the Central Committee in Beijing.
“We must clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation,” Xi said.
The Standing Committee of the 13th National People’s Congress in China has passed a new law regulating cryptography on Oct. 26 that will take effect on Jan. 1, 2020, China’s CCTV reported.
The new regulatory framework aims to set standards for the application of cryptography and the management of passwords and establishes the role of a central cryptographic agency meant to lead public cryptographic work, creating guidelines and policies for the industry.
Since a 2017 decision by the People’s Bank of China, cryptocurrencies are banned in the country, although a digital renminbi is being developed by the central bank and likely to launch soon.
China was one of the biggest sources of demand for cryptocurrencies during the 2017 bull run.
Some bitcoin analysts see the Chinese president’s public support of the blockchain technology forcing the U.S. and other major nations to embrace the technology, perhaps boosting bitcoin prices.
“It’s bullish for the entire crypto industry, in general, when you have the leader of one of the world’s largest economies coming to embrace blockchain technology like this,” eToro senior market analyst Mati Greenspan said.
However, bitcoin volumes have been struggling recently, leaving the market especially vulnerable to so-called “whales” placing large orders or liquidating short positions and the expiry of the CME bitcoin futures contract
may have exaggerated Friday’s move, according to Gabor Gurbacs of VanEck Associates.
Bitcoin trading volume among the top ten biggest bitcoin and crypto exchanges has fallen to under $200 million a day, according to bitcoin and crypto data company Messari, down 20-fold from a peak of $4 billion per day just a few months ago.
Meanwhile, last week, Facebook
CEO Mark Zuckerberg warned that Chinese superiority in the digital currency space could put the U.S. dollar at risk in an attempt to sell lawmakers his plans for the Libra stablecoin.
“China is moving quickly to launch a similar idea in the coming months. We can’t sit here and assume that because America is today the leader that it will always get to be the leader if we don’t innovate,” he argued.