Bitcoin’s Next Surge? China’s Economic Moves May Hold the Key

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.

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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.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.