News of Chinese President Xi Jinping’s comments supporting the development of blockchain technology sent Bitcoin’s price skyrocketing early last week. But Xi’s comments didn’t just affect the price of Bitcoin. They made a big splash in China’s A-shares and investment markets, too.
A-shares are stocks listed on one of mainland China’s two stock exchanges, the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE). These stocks are valued in renminbi, China’s national currency, and foreign investment access to them is limited, so they can be a good barometer for how China’s domestic investors are feeling.
Xi’s comments, in which he said that blockchain would play “an important role in the next round of technological innovation and industrial transformation,” had a clear impact on the domestic stock market. On Monday October 28, the first full day of trading following the news, blockchain-related A-shares stocks rose 8.63%. A-shares companies such as Ji Hong Co., Ltd. and Jin Gu Co., Ltd. rushed to publicize their own investments in blockchain, and investors were clearly interested in finding blockchain-linked stocks as well.
In the days that followed, blockchain stocks saw a small part of those gains reversed. But the overall impact was significant enough that the Shanghai Composite Index itself gained 0.85% on Monday (although it fell again on Tuesday and Wednesday). Read More...