These steps are seen as positive for Bitcoin suggesting Chinese investors view crypto as a viable option for preserving wealth.
Bitcoin and other cryptocurrencies are becoming more attractive to Chinese investors as the country’s economy struggles. This can be seen in the inflows that the over-the-counter (OTC) cryptocurrency brokers in the country are seeing, as stated in research by Chainanalysis.
Chinese Investors Move To Bitcoin
BTC may also benefit from the Bank of China’s recent announcement of a stimulus strategy aimed at revitalizing the economy. According to a report published by Chainalysis, Chinese investors have been shifting their focus to Bitcoin for a considerable amount of time, even before the Bank of China announced its stimulus strategy.
According to the study’s findings, the amount of money deposited into China’s over-the-counter (OTC) brokers has reached up to twenty billion dollars in each of the three quarters that ended in June.
These brokers have registered $75.4 billion in inflows over the past nine months. In 2021, China implemented a prohibition on the trade of Bitcoin and other cryptocurrencies was implemented in China in the year 2021.
Nevertheless, this demonstrates that there is still a significant demand for each of these digital assets, including Bitcoin.
Eric Jardine, the cybersecurity research lead at Chainalysis, claimed that these over-the-counter services are most likely to fall into the “gray zone” of the country’s economy, taking into account the prohibition on trading and mining cryptocurrencies.
It was also possible, he noted, that the prohibition is only partially enforced.Regardless of the circumstances, it is undeniable that these Chinese investors, who were well aware of the weak economy in their nation, viewed Bitcoin and other crypto currencies as a feasible alternative to save their wealth.
The Governor of the People’s Bank of China (PBoC), Pan Gongsheng, has announced a reduction of 50 basis points (bps) in the reserve requirement ratio, a reduction of 20 basis points (bps) in key short-term interest rates, and monetary stimulus in an effort to revitalize the economy.
Along with these Chinese investors’ interest in cryptocurrency, there are more reasons to believe its adoption in China is growing. Russia’s advocacy for cryptocurrency regulation, for example, suggests that the country intends to settle its international trade with China by making use of cryptocurrencies rather than the United States dollar.
BTC Price To Benefit From China’s Stimulus Policy
After the stimulus strategy implemented by the Bank of China, Bitcoin reached a price of $64,000. This move is believed to be bullish for Bitcoin because it has the potential to increase Chinese investors’ confidence in investing in the flagship cryptocurrency as well as other digital assets.
As a result of China’s stimulus plan and commerce with Russia, the price of Bitcoin is expected to reach $100,000. Dan Tapiero, a market specialist, has brought attention to the fact that the country’s rate cuts are optimistic for Bitcoin cryptocurrency.
In addition, Raoul Pal, the founder of Real Vision, concurred with the sentiment that this quantitative easing (QE) move is beneficial for the main cryptocurrency.
In addition, the trading firm QCP Capital indicated that they are of the opinion that the Bank of China will continue to ease monetary policy, while also pointing out that the macroeconomic environment appears to be optimistic for Bitcoin.
Meanwhile, China’s rate cuts came just one week after the Federal Reserve of the United States announced a reduction in interest rates by fifty basis points (bps). The occurrence of these macro events is one of the reasons why analysts believe it is possible that it may reach a new all-time high (ATH) quickly.
Additionally, the fourth quarter of the year is almost here, and it is the quarter in which Bitcoin generates the biggest profits.
