Over the past eight years, Bitcoin’s price has shown a consistent positive correlation with the People’s Bank of China's (PBOC) balance sheet.
Data from TradingView reveals that the 30-day correlation between Bitcoin and the PBOC stands at 0.66, except for brief periods in 2016 and late 2022-2023. Meanwhile, Bitcoin’s correlation with the U.S. Federal Reserve has dropped to a historic low of -0.88.
This trend is particularly relevant as the PBOC recently announced plans to inject 1 trillion yuan ($142 billion) into major state banks to bolster China’s economy.
Alongside this, the central bank lowered key interest rates, signaling a broad stimulus effort that may indirectly boost Bitcoin prices.
Bitcoin has already gained over 10% this month, reflecting optimism in global markets. Analysts suggest that China’s economic actions could funnel more investment into blockchain and crypto-related industries.
Additionally, some experts believe the stimulus will benefit riskier assets across the board, as investor sentiment shifts towards a more bullish outlook.
Coinbase, a leading US cryptocurrency exchange, believes digital assets are poised for significant appreciation in the coming months.
On September 27, Howard Lutnick, CEO of Cantor Fitzgerald, appeared on Fox Business and called for regulators to recognize Bitcoin as a commodity akin to gold and oil.
Bitcoin continued its upward momentum this past week, reaching as high as $66,000 on Friday, September 27th, as it looks to close out September strong and enter October with even more gains.
The Crypto Fear & Greed Index has hit its highest level since July, holding above 60 for two straight days.