A look at Monday's Chinese blockchain stock rally

Public reports started surfacing on comments made Oct. 25 by Chinese President Xi Jinping promoting blockchain as a technology for innovative breakthroughs for China.

On the Monday following Xi’s comments, Bloomberg published a report on the sudden trading frenzy in the Chinese stock market for blockchain-related stocks. “The gains were widespread Monday, with Insigma Technology Co. and Sinodata Co. among more than 60 tech shares surging by the daily limit in Shanghai and Shenzhen,” Bloomberg wrote.

That same day, Chinese asset management firm Guosheng Securities published a list of ~120 blockchain-related companies in China. The list also highlights 26 companies officially registered as blockchain businesses.

In this piece, we will analyze those 26 blockchain-registered companies and the impact of President Xi’s announcement on their price and volume. Below we charted out the daily median percentage price change and volume of our batch of blockchain stocks leading up to the Oct. 28 spike. We see an immediate impact on the price of these stocks on the first market day after Xi’s comments.

Because Chinese stock markets have daily price increase limits of 10%, we used the median percentage price change to better visualize the spike. 

Source: Factset, The Block, Guosheng Securities 

Despite the price spike, however, we did not see a significant increase in the total volume of these stocks. Individually, however, some stocks saw huge volume changes. Below is a chart of the 13 stocks in our batch that showed positive volume change on Oct. 28.

Source: Factset, The Block, Guosheng Securities 

We also charted out the 14 stocks that hit their 10% daily limits below.

Source: Factset, The Block, Guosheng Securities