While the crypto markets held steady on Wednesday, the flagship digital asset Bitcoin (BTC) tested $97K, striving for an eventual $100K reclaim. The bullish momentum fired up a few minutes after the Chinese government announced numerous interest rate cuts by the People’s Bank Of China (PBOC).
Bitcoin To Bite a Piece Of China’s 1T Yuan Liquidity?
Pan Gongsheng, the Governor of POBC, exclaimed at the press conference that reserve requirement ratios are going to be cut by 0.5%, solidifying the markets with a 1 trillion yuan addition in long-term liquidity. Moreover, the Chinese officials are poised to reduce the policy interest rate by another 10 basis points.
Intriguingly, this Chinese government press conference occurred just an hour ahead of the well-anticipated FOMC (Federal Open Market Committee) meet-up. However, the FOMC meeting didn’t return the same sentiment as Bitcoin (BTC) backtracked to $96,000 in the intra-day market correction, later bouncing back to $96,500.
How FOMC Meeting Sets The Stage For Bitcoin
On the bright side, the FOMC meeting has raised suspicions about quantitative easing (QE) now in play, meaning that the Federal Reserve is subtly injecting liquidity into the treasury. Indeed, the FED bought $14.8B worth of 10-year bonds without an announcement, boosting the bond investment to nearly $35 billion in just two days.
Following the FOMC meeting news, Bitcoin enthusiasts such as Arthur Hayes, the outspoken ex-Bitmex CEO, labeled the dovish stance “wildly bullish” for Bitcoin (BTC), as the fiat currencies are expected to be weakened, while crypto and stock markets can see a reinforced drive of inflows due to people maneuvering the headwinds of economic instability.
Later this Wednesday, FED Chair Jerome Powell is slated to deliver a speech on the global economy, which crypto connoisseurs are expecting to highly influence the crypto market one way or the other.
Recently, the FED Chair got off the crosshairs of Trump. Previously, Mr. Powell was rumoured to be sacked amid an intense smear campaign by the United States President Donald Trump, calling him a “major loser”, despite being nominated for the position by Donald during the first term back in 2018.
On The Flipside
- The tax relief by the Chinese government comes amid the first in a while meeting between the U.S. & China since the global trade war taking the tariff percentages to obnoxious levels on both sides.
Why This Matters
The political scene is closely tied to the general crypto & stock market sentiment, with the influence growing over the years due to new legislation and adoption cases.
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