The recent announcement of China’s massive economic stimulus package could propel Bitcoin’s price to new all-time highs. As Beijing injects colossal liquidity into its economy, analysts predict a significant impact on the crypto market, with BTC at the forefront.
China's stimulus plan: a springboard to new highs for Bitcoin?
The Middle Kingdom is bringing out the big guns to get its economic machine going again. The People's Bank of China (PBoC) has just announced an unprecedented stimulus plan since the pandemic, injecting $140 billion of liquidity into the financial system.
This decision is accompanied by a reduction in the mandatory reserve ratio and a relaxation of mortgage credit conditions.
The ambitious plan aims to combat headwinds holding back the world's second-largest economy. Looming deflation and persistent weakness in the real estate sector have prompted Beijing to act decisively. The authorities hope the plan will revive domestic demand and boost investment, two key pillars of Chinese growth.
Bitcoin, the unexpected big winner?
Paradoxically, Bitcoin, banned from China since 2021, could benefit from this massive recovery. Jamie Coutts, chief cryptocurrency analyst at Real Vision, says this injection of liquidity will have a bullish effect on the price of Bitcoin.
He said China's monetary easing could set off a chain reaction, prompting other central banks to follow suit.
The main argument is based on the historical correlation between global liquidity and Bitcoin performance. While the direct link to China is less clear since the ban, the impact on global risk appetite remains significant. Investors, looking for safe havens in the face of currency debasement, may turn more to cryptos.
The timing of this Chinese stimulus seems ideal for Bitcoin. The flagship crypto is already showing signs of technical strength, approaching the upper trendline of a bullish chart pattern. A break above this level could pave the way for a new all-time high, potentially beyond $78,000.
In short, the convergence between China’s expansionary policy and Bitcoin’s strong fundamentals creates fertile ground for a new phase of growth. If this momentum continues, the crypto market could well experience an explosive end to 2024, propelling Bitcoin into uncharted territory.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
