Markets
China’s financial moves and their ripple effect on the global cryptocurrency market
In his last analysesRenowned cryptocurrency expert Lark Davis highlights China’s significant influence on the global cryptocurrency market, particularly in light of recent developments in the country’s financial policies.
The new hash found in China is influencing the global cryptocurrency market
According to Davis, China’s plan to issue $140 billion in long-term bonds has attracted the attention of global investors. These 50-year bonds aim to address economic issues in China, such as government debt, real estate problems and weak consumer spending.
Cryptocurrency market and ETF buzz
Despite China’s cryptocurrency ban, Davis highlights the booming nature of the country’s cryptocurrency market. Second Catenaanalysis, China recorded an estimated raw transaction volume of $86.4 billion between July 2022 and June 2023, surpassing Hong Kong’s trading volumes. The proportion of large retail transactions in China is also significantly higher than the global average.
Furthermore, the potential launch of Bitcoin ETFs in Hong Kong, accessible to mainland China via Stock Connect, could further increase demand for cryptocurrencies. This comes as Chinese investors seek alternative assets amid property market challenges, with Bitcoin and gold emerging as attractive options for investment.
This sudden increase in liquidity resulting from China’s continued efforts, combined with Hong Kong’s growing presence in the cryptocurrency market, could lead to unprecedented price surges and market movements.
Rise of Bitcoin in China
Demand for Bitcoin in China has grown as other investments struggle. Bitcoin is up 50% since mid-October. China’s stock market has been the world’s worst, with the CSI index down 35% in three years and corporate earnings falling short of forecasts for ten quarters. Once seen as a safe bet, the real estate market is also in crisis. As a result, Chinese investors are turning to Bitcoin, considering it a safe haven.
Meanwhile, Michael Wang, a cryptocurrency trader who helps people buy digital assets, says daily volumes reach millions of yuan. Charlie Wong, an equity analyst, believes Chinese officials recognize Bitcoin’s disruptive potential and support cryptocurrency trading in Hong Kong to maintain a presence in the booming markets of Singapore and New York.