Coinspeaker
China’s Stimulus Program May Propel Bitcoin to New Historic Heights
The leading cryptocurrency, Bitcoin
BTC
$63,819
24h volatility:
1.0%
Market cap:
$1.26 T
Vol. 24h:
$24.76 B
is poised for a significant uplift following China’s recent economic stimulus announcement. On Tuesday, September 24, the People’s Bank of China (PBoC) revealed its largest stimulus effort since the onset of the pandemic, aiming to revive the nation’s economy from deflationary pressures and foster growth.
The PBoC declared that it would inject $140 billion in liquidity into the economy. Furthermore, it plans to reduce the reserve requirement ratio (RRR) by a substantial 50 basis points.
In addition, the PBoC has relaxed restrictions on property purchases and lowered borrowing costs to support economic recovery. China has faced challenges in its real estate market due to weak demand in recent months. Furthermore, a notable decline in credit demand from both businesses and consumers prompted the PBoC to respond swiftly.
“This is the most considerable stimulus package from the PBOC since the pandemic began,” commented Julian Evans-Pritchard, an analyst at Capital Economics. “However, it may not be adequate on its own,” he cautioned, indicating that further fiscal stimulus might be necessary to drive growth towards this year’s official target of approximately 5%.
Implications of China’s Stimulus Package for Bitcoin’s Future
Jamie Coutts, the chief crypto analyst at investment management firm Real Vision, asserts that China’s recent stimulus measures are beneficial for Bitcoin. He added that this could also prompt other central banks to lower interest rates. Coutts remarked:
“The bottom is in for global central bank liquidity for this cycle. Sit back and watch the other central banks align. In a credit-driven fiat fractional reserve system, debasement is a feature, not a bug.”
Since China’s prohibition of Bitcoin in 2021, the relationship between Bitcoin prices and Chinese liquidity has become less straightforward. Nonetheless, Coutts indicated that Bitcoin’s performance remains correlated with global liquidity, and China’s easing policies might influence a wider shift in risk appetite.
After the Federal Reserve’s rate cut in September, Bitcoin’s price rose sharply, climbing to $64,000. Technically, BTC appears strong, with potential for reaching a new all-time high in the near future.
Bitcoin’s long-term chart is currently establishing a bull-flag pattern. As shown in the image, as of September 24, BTC was nearing the upper trendline of this flag, setting the stage for a possible breakout above $78,000, marking a new all-time high.
next
China’s Stimulus Program May Propel Bitcoin to New Historic Heights
