More than 85 tech shares surged by the daily limit in Shanghai and Shenzhen on Monday after President’s Xi Jinping’s comments about blockchain technology. China also passed the cryptography law in the country, which would go into effect from January 1 of the next year.
However, the Chinese media outlet People’s Daily reported that investors should avoid speculative behavior. The report acknowledged that the future is here for blockchain but advised people to stay rational. It further added that regulations for blockchain need to be improved as the technology is still at an early stage.
According to the Bloomberg report, Sun Jianbo, president of China Vision Capital Management, said that the companies should focus on their main business and not jump on the blockchain bandwagon. He added that the support for the sector does not equal an endorsement of speculative trading.
Bloomberg also reported that after China’s media warning, Shenzhen Stock Exchange Information Technology Index lost as much as 1.4% on Tuesday.