Bitcoin Surges, Mixed Performance in Asian Stocks as Traders Review China’s Economic Stimulus – Decrypt

Bitcoin surged to a seven-day high late Sunday evening as Asian markets reacted to China’s economic stimulus measures announced over the weekend.

The cryptocurrency is up 2.5% for the day at $64,300, marking its highest level since October 7. This increase comes in the wake of assurances made by the world’s second-largest economy on Saturday.

China has pledged to “significantly increase” its debt to bolster its faltering economy, but without specifying the size of the stimulus package, leaving investors uncertain about the potential impact on the sustainability of the recent stock market rally.

Asian equities saw mixed performances on Sunday, with Chinese stocks registering some gains while other regional markets faced challenges. The Shanghai Composite climbed 1.6%, fueled by optimism following the announcement.

In Hong Kong, the Hang Seng Index dipped by 0.4%, whereas Japan’s Nikkei 225 saw a 0.57% rise, led by gains in tech shares. Markets in South Korea and Australia experienced minor fluctuations.

Bitcoin had surged above $65,000 last month following China’s announcement that it would inject $113 billion in liquidity to support its struggling stock market. The country also indicated it would reduce reserve requirements for banks and ease regulations on second-home purchases.

The Shanghai Composite has soared more than 20% in the past month. Recent data shows that Chinese stocks have started to catch up with their US counterparts, but with a modest 6.7% increase compared to the S&P 500’s 34.3%.

Experts anticipate that China’s central bank stimulus measures will continue to benefit the crypto market for the rest of the year in light of the US interest rate cuts and global factors.

Multiple favorable conditions have converged for Bitcoin, including China’s stimulus package, shifting US macroeconomic indicators, the impending presidential election, and support from FTX’s bankruptcy settlements.

In September, the latest US payroll figures exceeded expectations, with nonfarm payrolls rising by 254,000, well above the forecast of around 170,000.

The strength of the labor market has raised concerns that the Federal Reserve may postpone or scale back its planned rate cuts, as strong employment data could trigger inflationary pressures.

Last week, the Consumer Price Index rose 2.4% year-on-year, slightly surpassing estimates, with core CPI, excluding food and energy, up by 3.3%.

Despite the marginal increase, inflation seems to be moderating. The higher-than-expected CPI figures have led some analysts to suggest that the Fed may adopt a more cautious approach to further easing measures.

“We expected the market to pull back in early October due to portfolio rebalancing by investors at the start of the quarter, Pav Hundal, lead market analyst at crypto exchange Swyftx, told Decrypt. “We’re now over that hump, and the macro environment looks pretty good despite weak domestic demand in China.”

DeFi Daily News