Bitcoin Soars 2% as Asian Stocks Shift Amid Chinese Economic Stimulus

On Monday, Bitcoin experienced a strong start, breaching the $64K mark and surging by 2.40% in a day. The impressive surge renewed the investor’s interest, as seen on CoinMarketCap, with BTC’s daily trading volume surging by 67%. 

While Bitcoin garnered bullish steam, the Asian stock market became unpredictable, with prices experiencing dramatic swings. Looking beyond the mixed action between crypto and the stock market, economists and experts attributed the price change to Chinese stimulus measures. 

Crypto and Stock Market Reacts to China Stimulus Package

Under this measure, the Chinese government pledged to increase its debt to prevent the economy from collapsing. The expected debt increase received mixed reactions from market observers demanding to know the exact size of the stimulus package.

The Chinese stimulus package caused stocks in the Asian market to rally, with Shangai Composite increasing by 1.6%. Other top gainers on Asian stock included the CSI300 blue-chip index (CSI300) and the CSI300 Real Estate Index (CSI000952).

The Hang Seng Index (HSI) and  Hang Seng Mainland Properties Index (HSMPI) were the biggest losers. Data shows that the sluggish week started in  South Korean and Australian markets. Commenting on the slight fluctuation of the Asian stock, an analyst from Morgan Stanley noted that China’s decision to restructure housing debt and local government using the government fund had more impacts than expected.

Will Asian Stock Recover from Brief Slump?

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He said that while Hong Kong shares traded low, the Chinese shares had a strong start. With the mixed Asian stock price, the analyst forecasted a perfect storm for Bitcoin. The analyst recalled that when China announced plans to invest $113 billion to support stocks from further decline, Bitcoin surged exponentially and hit $65,000.

Guided by the consumer inflation data released last month, the Chinese government revealed plans to ease bank borrowing, which propelled crypto to the green zone.

However, reflecting on the recent price movement of crypto, experts project that enacting the Chinese stimulus package might favor the digital asset.

They projected Bitcoin and other crypto to register high gains in the last quarter of 2024, fueled by Chinese stimulus measures and the reduction of US interest rates. The experts noted that the crypto market led by Bitcoin has recently actively responded to macro events, including the China stimulus, the US presidential election, and FTX repayment.

Experts Explain How Macro Events After Crypto

The analyst recalled last month’s US employment report, which created a ripple effect across the crypto and stock market. The report demonstrated that the nonfarm payrolls soared, reaching  254,000. 

The release of employment data attracted criticism from key market players. Analysts, citing the robust employment data, projected that the Federal Reserve would delay or reduce the rate. Shockingly, the Federal Reserve agreed to lower the interest rate to encourage borrowing in September.

The reduction of interest rates triggered the consumer price index to increase by 2.4%, surpassing the estimated figures. The CPI exempting food and energy rose by 3.3%. The recent turn-off events demonstrated that the US inflation was cooling down.

However, experts projected that the increase in CPI obliges the Fed to be more cautious in adjusting current monetary policies. The expert prediction demonstrated that the future of crypto and the stock market hangs in the balance of macroeconomic events.

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