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