Digital currencies are all down today. Bitcoin has fallen by $500 in the past few hours. Eth is down 8%, clinging to that $300. While Bitcoin Cash has born the brunt, down nearly 20%.
Bitcoin is leading, with its trading volumes of $2 billion far higher than the rest, accounting for nearly half of the global digital currencies trading volumes.
The biggest and oldest digital currency was arguably overbought at near $6,000, so they tried downwards. With the rest following as most of them are traded against BTC.
But is this just a yo-yo random walk, or can we find some explanation? Well, we tried and can’t really see anything specific. So we’ll focus on the bigger picture.
Xi Jinping, China’s President, took to the podium for the five yearly gathering of the country’s elite. He has laid down a new ideology which:
“Builds on and further enriches Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the Theory of Three Represents, and the Scientific Outlook on Development. It represents the latest achievement in adapting Marxism to the Chinese context,” Xi said.
He is calling it a new era of socialism with Chinese characteristics. What that means really isn’t very clear, but it has something to do with “the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life,” according to Xi.
That’s been changed from the previous main contradiction between “the ever-growing material and cultural needs of the people and backward social production.”
We’d like to think he is talking about more free market reforms, with Xi apparently aiming to strengthen the application of intellectual property law to foster a culture of innovation. He says:
“We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies.”
It’s a bold ambition from a confident man and a confident China beaming with optimism following their astounding growth, with 4 more trillion dollars added to their GDP in the past five year.
That country is in many ways more advanced than the rest of the world, with their shiny futuristic new skyscrapers, their super fast trains that call imagination, and their QR codes in every corner of the nation.
Yet in other aspects they remain far behind. Their central planning has led to ghost towns and ghost factories. Their lack of public consultation has led to blunders, while their great firewall reminds us of their protectionist tendencies.
If China rises it does so less free than other parts of the world. And while Xi talks about encouraging disruptive technologies, their actions have shown a desire to micromanage all things.
He called for more free floating of the yen, but his Central Bank has done everything to play it up and down as they please.
And when he talks about encouraging innovation, he refers to “national science and technology projects.” At the same breadth he then criticizes Trump for being protectionist, when China has effectively kicked out all the great western tech companies and projects.
In some aspects, therefore, they might be modern, but in other aspects they are at least 50 years behind or more, prioritizing their own national companies and yen at the expense of the rest of the world.
A world that at the same time has opened its doors to China, but America can’t continue to manage at a half a trillion trade deficit caused primarily by China’s protectionist policies in areas of western strength, such as the knowledge economy.
So we’ll see how the blond lion will play the great chess game, now that he has proven himself following the defeat of ISIS, doing what many said can’t be done. Yet he did do in his first year in office.