Bitcoin (BTC) Might Be on Its Way to Breaching Its Previous All-Time High (ATH) Amid Recent Monetary Developments in China and Russia
- DDDOriginal
- 2024-09-25 03:13:08694browse
Following these developments, there are expectations of rising demand for Bitcoin, which could push the coin's price further.
Bitcoin (BTC) price might be heading towards its previous All-Time High (ATH) following recent monetary developments in China and Russia.
China Central Bank to Implement Aggressive Monetary Measures
People’s Bank of China (PBoC) Governor Pan Gongsheng unveiled several growth strategies to revive China’s economy amid concerns that the country may not reach its 2024 growth target of about 5%.
The proposed measures include a 50 bps cut in the reserve requirement ratio, a 20 bps cut in key short-term interest rates, and monetary stimulus. Additionally, the PBoC will relax rules for second-home purchases and lower borrowing costs on up to $5.3 trillion in mortgages.
Chinese policymakers aim to restore economic confidence after several disappointing data raised concerns about a prolonged structural slowdown. Capital Economics analyst Julian Evans-Pritchard said,
This is the most significant PBOC stimulus package since the early days of the pandemic.
Following the announcement, Chinese stocks and bonds rallied, while Asian markets hit two-and-a-half-year highs. However, Bitcoin price showed mild gains despite its higher volatility in response to stock market rallies.
Governor Pan did not specify when the changes would take effect. However, a 50 basis points (bps) rate cut will free up about 1 trillion yuan ($142 billion) for new lending. When this happens, demand for cryptocurrencies like Bitcoin will likely increase as the excess might devalue fiat value. This will make inflation hedges more attractive overall.
Russia’s Crypto Trade Move With China
The recent move by Russian authorities might contribute to the price of Bitcoin reaching $100,000. According to the report, Russia may get military supplies from China using cryptocurrencies for payments.
In June, Anatoly Aksakov, a member of the Russian State Duma, said that Russia and China have vast experience in cryptocurrency and that technological advancements in this area are progressing progressively.
Recent reports showed that plans are already being made for importers to be permitted to pay for Chinese goods in cryptocurrencies under an experimental legal regime. Among them were banks, electronics producers, and a few Russian Chamber of Commerce and Industry representatives.
It is important to note that the primary objective of Russian authorities is to reduce the dominance of the US dollar for global trade. There has been a defined shift from the BRICS nations regarding trade settlement in the past year.
As CNF mentioned, Russia became the first BRICS nation to legalize the use of crypto payments for trade. This development comes as the country faces growing financial pressure from the US sanctions.
In a recent update covered by CNF, Russia aims to finalize its crypto regulation framework by November.
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