On Wednesday (September 6) in the Asian market, Bitcoin remained weak at $25,800. China's bearish army raided the crypto market, and technical warnings showed that the price of the currency would continue to fall in the short term. China's top leader spoke in support of the digital RMB. Meituan, known as the "Chinese crypto whale" and holding a large amount of Bitcoin, signed a digital RMB cooperation agreement with the Bank of China. Weibo announced the closure of 80 crypto opinion leader accounts and issued an announcement to prevent and deal with virtual currency trading speculation. The total number of fans of these accounts exceeded 8 million.
The official account of Weibo Finance issued an announcement on preventing and dealing with virtual currency transaction speculation on Tuesday, saying that in order to implement the main responsibilities of enterprises, we must strictly implement the "Law of the People's Republic of China on the People's Bank of China", "The Law of the People's Republic of China on Commercial Banks" and "The Law of the People's Republic of China on Commercial Banks". Securities Law", "Cybersecurity Law of the People's Republic of China", "Telecommunications Regulations of the People's Republic of China", "Regulations on Preventing and Dealing with Illegal Fund Raising", "Decision of the State Council on Cleaning up and Rectifying Various Trading Venues to Effectively Prevent Financial Crisis", "State Council Office In accordance with the relevant management regulations of the Department's Implementation Opinions on Cleaning up and Rectifying Various Trading Venues, the site proactively investigates and receives complaints from users, and centrally handles information on illegal virtual currency transactions and speculation. According to relevant regulations, a total of 80 accounts were closed this time.
At the opening ceremony of the Shanghai Cooperation Organization in July, Chinese President Xi Jinping called on member states to strengthen cooperation on sovereign digital currencies, reflecting his hope that in the growing digital economy, the digital renminbi can accelerate his goal of de-dollarization. After China launched a large-scale pilot program for digital renminbi after 2020, it has become a leading power on the international central bank digital currency (CBDC) track. In January this year, the digital renminbi was officially included in the category of cash in circulation (M0) in currency data statistics.
According to news from Chinese state media early this week, Bank of China and e-commerce giant Meituan have signed a digital renminbi cooperation agreement, and both companies hope to strengthen their digital renminbi capabilities. The two companies signed a cooperation agreement through Stockstar that will allow them to deepen their cooperation on digital yuan. The new agreement will build on the existing central bank digital currency cooperation agreement signed by the two companies in 2021.
The new agreement signed by Meituan states that the two companies will work together to develop solutions beyond retail commerce, which was the initial focus of the pilot. In addition, the cooperation will also be extended to enterprise services powered by the digital renminbi, and they will also explore cross-border use cases for the digital renminbi.
In addition, Meituan will also move beyond smartphone-based digital yuan use cases and expand the adoption of “hardware wallets,” which refers to smart cards, SIM cards or wearable devices that do not require an internet connection to make payments. Both China and Russia insist that their central bank digital currencies will be available offline to non-smartphone users to increase inclusivity.
In early 2021, Meituan announced the addition of digital renminbi payment options to its Meituan Food Delivery network, and the company has also been trying to spur adoption by giving away digital renminbi vouchers that can be redeemed on its website, with potential recipients required to open a digital renminbi wallet. Meanwhile, Bank of China has been working with another e-commerce giant, JD.com, on a cross-border digital yuan pilot in Hong Kong. Last week, Likou Town, Siyang County, Jiangsu Province, China, reached an agreement with the Postal Savings Bank of China to make Likou a digital renminbi “demonstration town.”
China's efforts to win over Meituan to return to the embrace of the digital RMB have caused concerns in the crypto market. The company released its 2023 interim performance report, and the impairment of its cryptocurrency holdings rebounded by 186 million yuan. Data shows that in the first half of this year, Meitu's revenue reached 1.261 billion yuan, a year-on-year increase of 29.83%; the net profit attributable to shareholders reached 228 million yuan, turning losses into profits compared with the same period last year, and exceeding the previously announced 220-260 million yuan.
Public information shows that Meitu purchased a total of 31,000 Ethereum coins and approximately 940.89 Bitcoins in 2021, with a total price of US$100 million and a total of approximately RMB 670 million. The cryptocurrency held by Meituan suffered serious floating losses during last year's bear market. However, since this year, as the price of cryptocurrency has rebounded, Meitu’s book impairment has increased by 186 million yuan, becoming the biggest contributor to the improvement in performance.
Although China continues to suppress Bitcoin, Hong Kong has received further updates on the progress of cryptocurrency trading. Guofu Innovation, a Hong Kong listed company, announced a connected transaction to acquire the equity of the target fund. The board of directors announced that on September 4, 2023, its wholly-owned subsidiary Fortune Genesis Holdings Limited planned to acquire the target from Dr. Liu Zhiwei, the company’s chairman, executive director and major shareholder. 1459.8151 shares of the fund Summer Feeder Fund Limited were purchased for US$1.6 million.
The investment target entity of the target fund is SEBA Bank AG, a banking entity mainly engaged in cryptocurrency-related banking services. In view of the favorable environment and market environment for blockchain technology, the acquisition is a good opportunity for the Group to enter the virtual asset business and apply blockchain technology to provide banking solutions and financial services.
Bitcoin technical analysis
CMTrade said that on the 4-hour chart, Bitcoin’s short-term momentum is still weak, and there are signs of continued decline in the short-term. The market is enveloped in bearish sentiment, with the MACD indicator in the bearish zone and maintaining consolidation, and the RSI indicator hovering weakly below the 50 equilibrium line.
Resistance level: 26104 26356
Support level: 25437 25222
Trading strategy: short below 25852, target 25437 25222
