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The bitcoin price has rocketed over the last two years, rocketing by over 200%, largely due to the BlackRock-led Wall Street bitcoin revolution (which is suddenly hurtling toward a fresh earthquake).
Now, as details emerge of a secret meeting between Elon Musk and El Salvador’s bitcoin-backing president Nayib Bukele, China has unleashed a flood of stimulus measures designed to prop up its stalling economy, hot on the heels of the U.S. Federal Reserve cutting interest rates and kicking off a global monetary policy easing cycle.
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China president Xi Jinping has unleashed huge stimulus measures to fight slowing growth and … [+]
People’s Bank of China governor Pan Gongsheng has announced a series of “bold” stimulus measures, cutting bank reserves by 50 basis points and reducing mortgage rates to spur 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.”
“More and bolder easing measures could also be in store in the coming quarters,” Vasu Menon, managing director of investment strategy at OCBC, added.
The bitcoin price and wider crypto market has so far failed to move on the news out of China even as stocks across Asia soared to their highest in more than two and half years.
“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 U.S. markets, as evidenced by near two-year high correlations with U.S. stocks, particularly following last week’s FOMC [Federal Open Market Committee] meeting,” Rick Maeda, a Singapore-based research analyst at Presto Research, told Coindesk.
Last week, the Fed’s historical 0.5% interest rate cut pushed the bitcoin price sharply higher as traders braced for the beginning of a new liquidity cycle.
The Federal Reserve interest rate cut and stimulus from China are predicted to trigger a bitcoin price surge over the next few years by some bullish investors.
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The bitcoin price has surged higher over the last few years, powered by the Federal Reserve and … [+]
“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.
“I’m more of a 2026, 2027 sort of person. Next year, we really get a ramp up in fiscal spending regardless of who wins the U.S. election. And if the U.S. dollar declines a lot, then China has room to enact stimulus as well and keep the yuan stable. And then you have the rest of the major central banks following in the footsteps of the Fed. They look at the Fed; they’re easing so we can ease too.”
Hayes has previously said he expects a China “bazooka” combined with the Fed easing to create a “glorious” crypto bull market.