Stimulus Measures, US Policies Impact on China Crypto Market
Bitcoin has surged following a rise in September, driven by rate cuts from the US Federal Reserve and stimulus measures by China aimed at boosting their economies, capturing the attention of global financial markets and highlighted the growing influence of the China crypto market.
The combination of these economic factors has contributed to renewed interest and investment in Bitcoin.
The increase has come at a time when warnings of inflation have been raised, even as industry leaders such as the CEO of JPMorgan issued threatening signals about the economy.
In two years, Bitcoin has surged over 200%, powered by increasingly fast-growing involvement by Wall Street, particularly by BlackRock.
Stimulus Measures Impact on Crypto Market
The People’s Republic of China Pan Gongsheng announced major stimulus measures, such as cutting bank reserve by 50 basis points, as well as the reduction of mortgage rates to boost economic growth.
“I think these are pretty bold moves from authorities,” Kyle Rodda, senior financial market analyst at Capital.Com, told Reuters.
“It doesn’t qualify as ‘big bang’ stimulus. It’s mostly targeted at financial markets and supporting the banking system… Overall, for investors, it’s a very bullish thing,” Rodda added.
The Federal Reserve has also undertaken fundamental measures to boost their falling economies, such as cutting interest rates and starting a Bitcoin and monetary policy.
It has implemented key measures to support the struggling economy, including cutting interest rates and integrating Bitcoin and monetary policy considerations, to help stabilize the financial system and adapt to the growing influence of digital currencies like Bitcoin in global markets.
US Federal Reserve’s Reaction
The US Federal Reserve made a remarkable 0.5% cut in interest rates, to which the price of Bitcoin surged last week. According to investors, such measures may indicate the beginning of a longer liquidity cycle, and could push Bitcoin and other crypto assets even further. This fed interest rate on crypto is influencing the market dynamics.
With Asian stocks driven to new highs by the stimulus measures, the price of Bitcoin has so far remained stable, indicating that China and Bitcoin are building a new digital payment future.
“Bitcoin’s lack of response to this news, juxtaposed against rallying Chinese indices, highlights that its current beta appears more tightly linked to Fed policy and US markets, as evidenced by near two-year high correlations with US stocks, particularly following last week’s FOMC [Federal Open Market Committee] meeting,” Presto Research analyst, Rick Maeda,told Coindesk.
Despite China crashed crypto market and following the recent period of no immediate reaction within China crypto market, stimulus from both countries to push for Bitcoin soon. The fact that long-term Bitcoin may be capable is something other experts just won’t rule out. Arthur Hayes, co-founder at BitMex, is optimistic.
I still have a $1 million [bitcoin] price target,” Arthur Hayes, a cofounder of bitcoin and crypto derivatives pioneer BitMex who went on to set up the Maelstrom investment fund, told Coindesk last week.
With the US Federal Reserve already leading the way to flowing monetary policies, other central banks around the world are doing the same thing, and some will say this sets up a perfect pathway into a new crypto market in China, given that people look to buy bitcoins in China.
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