The state-run Xinhua News Agency has warned that misunderstandings amongst investors threaten to inflate a bubble in blockchain-related tech stocks.
A new Xinhua article entitled “Blockchains: The Scope of the Bubble Equals the Scope of Misunderstanding” (区块连： 误解有多少， 泡沫就有多少) points to roaring growth in companies associated with the new technology.
“China’s financial institutions, Internet companies, IT firms and manufacturing enterprise are all actively making preparations to enter the game,” said Xinhua.
“Data indicates that the number of Chinese blockchain-related listed companies have already increased to around 30.”
While acknowledging the importance of the new technology as “one of the representative fruits of the fourth industrial revolution” and the need for research and development of new applications, Xinhua also warns of the potential for it to drive speculative bubbles, whether in associated stocks or cryptocurrencies.
“”There exists a severe speculative trend within the industry surrounding blockchain technology, and projecting ahead this will not be of benefit to practical expansion of applications of the technology.
“On 13 November, Hong Kong listed company Ping Shan Group (坪山茶叶) made the public announcement that it had changed its name to ‘Blockchain Group Company Limited.’
“Up until now the company’s main business does not have any marked involvement with blockchain operations, but its share price has nonetheless seen a definite rise.”
The Xinhua article arrives just after an editorial from by the People’s Daily warned of the perils of blockchain-related speculation, as well as the suspension of a number of blockchain-related shares by both the Shanghai and Shenzhen Stock Exchanges, and the issuance of official warnings to investors about the perils of speculative investment.