New Bull Narrative for Bitcoin? China considering stimulus package

Bitcoin and the crypto market may get another bullish story from China. As reported by Bloomberg, the country is considering a major stimulus package to jump-start economic recovery after the economy restarts following restrictive corona measures.

Noted expert Lex Moskowski noted via Twitter that in light of the recent opening of cryptocurrency trading in Hong Kong to retail investors, a new bullish story is emerging. According to him, Chinese stimies could go straight into “unregistered securities” (an allusion to the classification of altcoins by SEC chairman Gary Gensler).

Chinese going steamy in your unregistered securities.

Here is your bullish narrative.

— Lex Moskovski (@mskvsk) June 13, 2023

China considering stimulus package

China is considering a comprehensive package of stimulus measures as pressure mounts on Xi Jinping’s government to revive the second-largest economy, according to reports. Anonymous sources claim the proposals include at least a dozen measures to support sectors such as real estate and household demand.

Reportedly a particular focus is on China’s troubled real estate market, which is a key part of the package. Chinese regulators reportedly want to reduce the cost of outstanding residential mortgages and lending by the country’s policy banks to ensure homes are delivered.

Apart from this, a cut in interest rates is also being considered by the People’s Bank of China (PBOC). Speculation had started recently after the central bank unexpectedly cut its seven-day reverse repo rate.

However, it is important to emphasize that the incentive plan has not yet been finalized and may therefore be subject to change. Still, China’s State Council could discuss the measures as early as this Friday. Still, it is not clear when they will be announced or implemented, the report said.

What effect could the package have on bitcoin and crypto?

While investors in the broader financial market are likely to welcome the Chinese authorities’ plans, assessing the extent to which bitcoin and crypto may also benefit from the stimulus package will depend a lot on the final scope and composition of the stimulus measures. .

Nevertheless, the package and the recent opening of Hong Kong on June 1st is an interesting development regarding cryptocurrencies. Liberal Hong Kong is considered a gateway for wealthy Chinese to invest in overseas property.

Meanwhile, the expected “China effect” on the bitcoin and crypto market has yet to materialize, as exchanges are slow to register. For example, Coinbase just received an invitation from Hong Kong lawmakers to apply as a Bitcoinist in the territory yesterday. informed of,

In the US, the $1,200 stimulus check had a measurable effect on bitcoin. According to the Federal Reserve Bank of Cleveland, there Was There was a “significant increase” in April 2020 to buy bitcoin at $1,200. Furthermore, the central bank noted that total bitcoin trading volume increased by approximately 3.8% in response to the distribution of the first stimulus checks.

While the environment in China cannot be compared with the US, a similar effect may still be possible. As NewsBTC chief analyst Tony “The Bull” recently discussed, Bitcoin’s best growth has always been preceded by a large monetary stimulus.

All of Bitcoin’s Best Rallies Were Preceded by Major Monetary Stimulus

zoom out pic.twitter.com/uR2r1zkyrG

— Tony “The Bull” (@tonythebullBTC) June 4, 2023

This time, the stimulus may not come from the US, but from China. At press time, bitcoin was priced at $26.226 in the US ahead of today’s important CPI release.

Featured image from Financial Times, chart from TradingView.com