Chinese investors are seeking shelter in Bitcoin and other cryptocurrencies as the country’s economy struggles. This is evident in the inflows that the country’s over-the-counter (OTC) crypto brokers are witnessing, according to a report by Chainanalysis. The Bank of China recently announced a stimulus policy to help revive the economy, which could also benefit BTC.
Chinese Investors Move To Bitcoin
A report by Chainalysis shows that Chinese investors have been moving to Bitcoin even long before the Bank of China announced its stimulus policy. According to the study, inflows into China’s OTC brokers have reached up to $20 billion in each of the three quarters through June. Over these nine months, these brokers have recorded a total of $75.4 billion in inflows.
In 2021, China banned the trading of Bitcoin and other cryptocurrencies. However, this proves there is still a great demand for these digital assets, including BTC. Eric Jardine, the cybercrime research lead at Chainalysis, stated that these OTC services likely fall into the “gray zone” of the country’s economy, considering the ban on trading and mining of cryptocurrencies. He added that it might be that the ban is loosely enforced.
Whatever the case, it is evident that these Chinese investors, well aware of the country’s weak economy, saw BTC and other crypto tokens as a viable alternative to protect their wealth. To revive the economy, the People’s Bank of China (PBoC) Governor Pan Gongsheng announced a 50 bps cut in the reserve requirement ratio, a 20 bps cut in key short-term interest rates, and monetary stimulus.
Meanwhile, besides these Chinese investors’ interest in crypto, there are other reasons to believe there is growing crypto adoption in China. For instance, Russia’s push for crypto regulation indicates it will settle its international trade with China using cryptocurrencies instead of the US dollar.
BTC Price To Benefit From China’s Stimulus Policy
BTC rose to $64,000 following the Bank of China’s stimulus policy. This move is considered bullish for BTC as it could boost Chinese investors’ confidence in investing in the flagship crypto and other digital assets. Per a CoinGape report, the Bitcoin price targets $100,000 on the back of China’s stimulus package and trade with Russia.
Market expert Dan Tapiero also recently highlighted how the country’s rate cuts are bullish for BTC. Raoul Pal, the founder of Real Vision, also agreed that this quantitative easing (QE) is positive for the flagship crypto. Trading firm QCP Capital also stated that they believe there will be more easing from the Bank of China while noting how the macro space looks bullish for Bitcoin.
Meanwhile, China’s rate cuts come just a week after the US Federal Reserve announced a 50 basis points (bps) rate cut. These macro events are among the reasons analysts predict it could hit a new all-time high (ATH) soon enough. The fourth quarter of the year is also almost here and is the most profitable quarter for BTC.
Boluwatife Adeyemi
Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across DeFi, NFTs, smart contracts, and blockchain interoperability, among others. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover and a part-time degen.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
✓ Share: