In an unusual coordinated report on Friday, several Chinese state-owned media covered cryptocurrencies, calling them the best-performing assets of 2020.
The country’s top broadcaster, China Central Television (CCTV), ran a three-minute-long news clip, highlighting crypto assets rallying 70% this year.
“Cryptocurrency has undoubtedly become the top-performing investment” among several other global assets, said the report.
The clip also mentions DeFi and the weak dollar as the two reasons for the crypto bull market this year.
“China is just getting started on DeFi…” said a researcher at crypto fund The Spartan Group who noted the retail investors are likely to go for early DeFi projects in China like DODO and MCDex and the blue chips UNI, YFI, COMP, and MKR that also has a Chinese community.
CCTV also covered ETH being the top performer and fear of inflation driving the growth along with the central banks experimenting with CBDCs as a bull case for cryptocurrencies but government regulations being a major uncertainty.
“There is another following coverage today on CCTV2 abt PBOC encouraging accelerating DCEP adoption and enlarging beta test cases. So previously, coverage on ‘cryptoasset’s top performance’ seems to be related to this DCEP bull narrative in general,” noted Dovey Wan of Primitive Crypto.
A Bullish Affair
All of this got the Chinese crypto community’s attention, who shared the clip on WeChat as a bullish signal.
Most people on Twitter probably don’t understand how big this is. It is big. 😆
— CZ Binance (@cz_binance) September 25, 2020
CCTV’s crypto reporting came after state-owned news agency Xinhua which also published an article titled, “Cryptocurrency is this year’s ‘No. 1 asset’” a day before. Prior to its digital version on Xinhua, the same article appeared on one of the longest-running state media, Cankaoxiaoxi, in print form.
Such a rare coordinated effort is at odds with China’s stance on crypto speculation, but trader Qiao Wage said it is a “misconception” that the Chinese government has always been “hostile” towards Bitcoin and crypto.
“If there was a parallel financial system that could rival the dollar-based system, they would love to be part of it. What they are hostile towards is fraud and speculative craze,” he said, adding, “I do agree with the view that they are against capital flight using crypto, which is pretty obvious.”
Two red lines: 1) currency control regime 2) fraud or excessive speculation that could lead to pockets of social unrest
— Matthew Graham (@mattysino) September 26, 2020
Yesterday, the South China Morning Post also reported of at least 1 trillion yuan ($145.5 billion) worth of funds moving out of China into gambling activities every year, aggravating the country’s economic and financial security risk, as per Liao Jinrong, the director-general of the International Cooperation Department under the Ministry of Public Security.
“The volume and speed of cross-border capital flows are unprecedented,” Zhu Min, head of the National Institute of Financial Research at Tsinghua University, was quoted by the People’s Daily mouthpiece this week.
“This will not only result in sustained fluctuations in major world currencies, but will also lead to higher volatility in global financial markets. Therefore, we must be prepared for potential risks,” he said.