Markets
China’s Financial Moves and Their Ripple Effects on the Global Crypto Market
In his last analysisRenowned cryptocurrency expert Lark Davis sheds light on China’s significant influence on the global cryptocurrency market, especially in light of recent developments in the country’s financial policies.
New Chinese Hash Impacts Global Crypto 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 problems in China, such as public debt, real estate problems and weak consumer spending.
Cryptocurrency market and ETF buzz
Despite China’s ban on cryptocurrencies, Davis highlights the thriving nature of the country’s cryptocurrency market. According to On-Chain Analysis, China recorded an estimated gross trading volume of $86.4 billion between July 2022 and June 2023, surpassing trading volumes in Hong Kong. The proportion of large retail transactions in China is also significantly higher than the global average.
Additionally, 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 challenges in the real estate market, with Bitcoin and gold emerging as attractive investment options.
This sudden increase in liquidity resulting from China’s continued efforts, coupled with Hong Kong’s growing presence in the crypto market, could lead to unprecedented price hikes and market movements.
Rise of Bitcoin in China
Demand for Bitcoin in China has increased because other investments are struggling. Bitcoin has surged 50% since mid-October. China’s stock market has been the worst in the world, with the CSI index down 35% over three years and corporate profits falling short of forecasts for ten quarters. Once considered a safe bet, the real estate market is also in crisis. As a result, Chinese investors are turning to Bitcoin, viewing it as a safe haven.
Meanwhile, Michael Wang, a crypto trader who helps people buy digital assets, says daily volumes are reaching millions of yuan. Stock analyst Charlie Wong, meanwhile, believes that Chinese officials recognize the disruptive potential of Bitcoin and support crypto trading in Hong Kong in order to maintain a presence in the booming crypto markets of Singapore and New York.