China’s Financial Moves and Their Ripple Effect on the Global Crypto Market
The post China’s Financial Moves and Their Ripple Effect on the Global Crypto Market appeared first on Coinpedia Fintech News
In his latest analysis, renowned cryptocurrency expert Lark Davis illuminates China’s significant influence on the global cryptocurrency market, particularly in light of recent developments in the country’s financial policies.
China’s New Found Hash is Impacting Global Crypto Market
According to Davis, China’s plan to issue $140 billion in long-term bonds has caught global investor attention. These 50-year bonds aim to tackle economic issues in China, like government debt, real estate troubles, and weak consumer spending.
Cryptocurrency Market and ETF Buzz
Despite China’s ban on cryptocurrencies, Davis highlights the booming nature of the country’s crypto market. According to Chainalysis, China witnessed an estimated $86.4 billion in raw transaction volume between July 2022 and June 2023, surpassing trading volumes in Hong Kong. The proportion of large retail transactions in China is also notably higher than the global average.
Moreover, the potential launch of Bitcoin ETFs in Hong Kong, accessible to mainland China through Stock Connect, could further increase the demand for cryptocurrencies. This comes as Chinese investors seek alternative assets amidst challenges in the property market, with Bitcoin and gold emerging as attractive options for investment.
This sudden increased liquidity resulting from China’s ongoing efforts, coupled with the growing presence of Hong Kong in the crypto market, may lead to unprecedented price surges and market movements.
Rise of Bitcoin in China
Demand for Bitcoin in China has grown because other investments are struggling. Bitcoin has surged 50% since mid-October. The Chinese stock market has been the worst in the world, with the CSI Index down 35% over three years, and company earnings missing forecasts for ten quarters. Once seen as a safe bet, the property market is also in a slump. As a result, Chinese investors are turning to Bitcoin, viewing it as a safe haven.
In the meanwhile, Michael Wang, a crypto trader who helps people buy digital assets, says daily volumes reach millions of yuan. Whereas, Charlie Wong, an equity analyst, believes Chinese officials recognize Bitcoin’s disruptive potential and support crypto trading in Hong Kong to maintain a presence in the booming crypto markets of Singapore and New York.
