By
Temitope Olatunji
April 26th, 2024
China is reportedly planning to inject $278 billion in liquidity to boost its stock markets and these reports have led to positive price movements in its asset markets but not for Bitcoin.
The price movements of Bitcoin over the first weeks of 2024 have been interesting, to say the least. The token ended 2023 around the $42,000 per token mark and after the spot Bitcoin ETF was approved, the price saw a positive movement. But in the last week or so, Bitcoin’s price has taken a hit and as of this article, is trading below the $40,000 mark.
Interestingly, the price of Bitcoin has not recovered, even with alleged China’s stock market reboot plans.
China’s Plans for the Stock Market
According to recent reports, China is looking into using $278 billion in offshore state-owned accounts to aid the stock market. Along with injecting fresh liquidity into the markets, it is rumored that certain regulatory steps will be taken to support the stock market. This comes after the country took some steps to regain investor confidence but these fell short. Even though these plans have not been officially confirmed, the Chinese stock markets have responded positively to it.
Hong Kong’s Hang Seng index, which had been down 31% in the last year, shot up by 2%. Mainland China’s CSI 300, which had been down 23%, went up by 0.15%. This sort of positivity is exactly what the market seemingly needed and should the actual reboot plans go through, they might be successful.
But notably, Bitcoin itself has not responded positively to this news and continues to be in the red. It would seem that Bitcoin’s price movements are more affected by developments specifically relating to the crypto space, especially in light of the ETF approval.
At the same time, Bitcoin has other milestones this year that could positively impact its price. As of this article, there are only 93 days left before the next Bitcoin halving, when the block rewards given by the network are cut in half. This event has typically led to a positive price movement and this time seems to be no different.
This news is also interesting given the complex relationship that crypto has had with China over the years. China is one of the few countries where cryptos are outright banned, though citizens have been known to trade them using VPNs. A few years ago, the country also cracked down on crypto mining, which had been prominent in several regions. China did release its own central bank digital currency called the digital yuan, though this did not quell the demand for tokens like Bitcoin.
For now, it is left to see whether or not China will go through with the reboot plans. If they come to fruition, perhaps they will then have an impact on the Bitcoin price as some have hoped.