Tue 24 September 2024 ▪
3
min reading ▪ acc
The recent announcement of China’s massive economic recovery plan could push the price of Bitcoin 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 Recovery Plan, Springboard to New Highs for Bitcoin?
The Middle Kingdom is bringing out the heavy artillery to rev up its economic machine. The People’s Bank of China (PBoC) just announced a stimulus plan unprecedented since the pandemic that injected $140 billion of liquidity into the financial system.
This decision is accompanied by a reduction in the rate of mandatory minimum reserves and a relaxation of the terms of real estate loans.
The ambitious plan aims to combat headwinds holding back the world’s second-largest economy. Looming deflation and continued weakness in the real estate sector forced Beijing to act decisively. By doing so, the authorities hope to revive domestic demand and stimulate investment, the two main pillars of China’s growth.
Bitcoin, the big surprise winner?
Paradoxically, Bitcoin, banned in China since 2021, could benefit from this massive recovery. Jamie Coutts, chief crypto analyst at Real Vision, says this injection of liquidity will have an upward effect on the price of Bitcoin.
He said China’s easing of monetary policy 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. Although the direct link to China is less clear since the ban, the impact on overall risk appetite remains significant. Investors looking for a safe haven in the face of currency depreciation could turn more to cryptocurrencies.
The timing of this Chinese recovery seems ideal for Bitcoin. The flagship cryptocurrency is already showing signs of technical strength and is approaching the upper trendline of the bullish chart. A break of this level could pave the way for a new all-time high, potentially as high as $78,000.
In short, the convergence between China’s expansionist policies and Bitcoin’s strong fundamentals creates fertile ground for a new phase of growth. If this momentum holds true, the crypto market could experience an explosive end to 2024, propelling Bitcoin into uncharted territory.
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I am passionate about Bitcoin, I love exploring the intricacies of blockchain and cryptocurrency and sharing my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.