March 2, 2024

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Bitcoin (BTC) Prices More Impacted by ETF and GBTC Inflows, Rather than China's Stimulus Plan: Analysts

Bitcoin (BTC) Prices More Impacted by ETF and GBTC Inflows, Rather than China's Stimulus Plan: Analysts

Authorities in China Consider a 2 trillion yuan ($278 billion) plan. To restart a faltering stock market, but the impact of the plan – which pushed markets in Hong Kong and the mainland into the black – appears to have trickled down to the price of Bitcoin. (btc).

Bloomberg said Beijing plans to use offshore accounts of state-owned enterprises and local funds to invest in local stocks through a Hong Kong Stock Exchange link and other measures that have not yet been announced.

Local stock market indices responded positively to the news, with Hong Kong's Hang Seng rising 2% and the CSI 300, an index of mainland Chinese stocks, rising 0.15%. The Hang Seng Index is down 31% over the past year, while the CSI is down 23%.

This advertised method of injecting offshore funds into the mainland stock market aims to enhance liquidity and confidence. Bloomberg also reported that additional support measures yet to be detailed range from regulatory changes to financial interventions pending senior leadership approval.

For its part, Bitcoin is seeing its market dynamics more influenced by inflows into exchange-traded fund (ETF) products and standard outflows from Grayscale Bitcoin Trust (GBTC), CoinDesk was previously reported.

In addition, some analysts believe that the actions taken by the People's Bank of China to support the yuan amid a falling stock market and increasing dollar strength could negatively impact the price of Bitcoin due to its inverse correlation with the US dollar.

“China is incentivized to maintain a lid on BTC to maintain a relative veil of currency stability and discourage capital flight. “Past events when the yuan came under pressure have coincided with BTC’s underperformance,” said David Brickell, head of international distribution at Toronto-based cryptocurrency platform FRNT Financial. He previously told CoinDesk In an interview.

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However, some market watchers have a more optimistic view.

“The recovery of the Chinese economy will have profound implications for the global economy, and any stimulus or accommodative policy will be an encouraging sign for investors. The cryptocurrency market will also look to He views such policies as risky and, therefore, will be more willing to be innovative and active in expanding the market.