China (unofficially) authorizes Bitcoin, price bullish

     While many media and financial experts point to the massive influx of funds from China to the West trading Bitcoin as the reason for the recent rise in Bitcoin prices, China’s internet watchdog has announced that it can no longer “ignore its revolutionary changes” and that we have entered the “post-Bitcoin era”.

     It now appears that the attitude of Chinese law enforcement and government agencies towards cryptocurrencies may be easing. Based on recent events and publications regarding China’s cyberspace management, the government appears to have tacitly authorized the use of Bitcoin and the operations of Bitcoin startups and exchanges.

     In its latest publication, the CAC noted that the U.S. Commodity Futures Trading Commission (CFTC) officially defined Bitcoin as a commodity, which its banking regulator said would facilitate the regulation of electronic currencies.

The publication also added in part:

     “While some view Bitcoin and its related technology, blockchain, as unstable, we cannot ignore the revolutionary changes it has brought to the financial industry. This new technology has led to the expansion of a distributed payment and settlement mechanism that will open up new financial transactions.”

     In addition, the CAC firmly believes that the “post-Bitcoin era” brings the characteristics of virtual currencies, including Bitcoin, which is closer to real money through its safe and reliable core functions and technical mechanisms. The CAC also cited Europe’s approach to cryptocurrencies and the increased attention from major banks.

“Recently, attention has shifted from the traditional financial sector to blockchain technology. For example, according to the European Banking Association (EBA) in its latest report, blockchain technology can reduce costs, improve product offerings and increase the speed of transaction settlement.”

     Finally, the article also emphasizes that Bitcoin is becoming more and more like a real currency with less volatility, and declares that we have entered a new stage of development. An excerpt:

     “Digital currencies have entered the ‘post-Bitcoin era’, moving away from [volatility] and towards regulation and mainstream.

     The publication was released on October 13, around the same time that the price of Bitcoin began to surge in China. It was also during the Harvard Business Review China’s first Global Blockchain Summit in Shanghai, which may have increased Bitcoin hype and buying pressure on local Bitcoin exchanges.

While this unofficial announcement by the Chinese government appears to have boosted the price of Bitcoin by around 15%, it is important to note that the largest Bitcoin exchanges, businesses and mining pools are based in China and within a few months, this could be the main factor driving the price of Bitcoin.