As a seasoned financial analyst with over two decades of experience, I have seen my fair share of market fluctuations and economic policies. The recent announcement by the Chinese Central Bank to cut interest rates has piqued my curiosity, and I believe it could potentially be a game-changer for the cryptocurrency market, particularly Bitcoin.
In response to the recent interest rate reduction declared by the U.S. Federal Reserve, the governor of the People’s Bank of China (PBOC) has indicated that comparable measures may be implemented in China.
On the popular social media platform, formerly known as Twitter, numerous crypto influencers and financial experts are increasingly convinced that China’s recent interest rate reduction could strengthen Bitcoin’s upward trend and stimulate its continued expansion in the coming days.
China confirms interest rate slash, will this benefit Bitcoin?
Today, Pan Gongsheng, head of the Bank of China, announced that the People’s Bank of China (PBOC) plans to lower its 7-day repo rate by 0.2 percentage points. In addition, he mentioned that the reserve requirement ratio (RRR) for domestic banks will be reduced by 50 basis points.
As an analyst, I can share that the governor didn’t specify an exact timeline for enacting these economic support measures, yet he confidently expressed to the press conference audience that this action will indeed be taken in the near future.
As a researcher, I’d like to highlight that the central bank has indicated potential adjustments to interest rates based on the evolving economic conditions. By the year-end, we might witness another reduction of either 0.25 or 0.5 basis points, subject to the ongoing economic scenario.
In simpler terms, the markets in China anticipated a relatively minor interest rate reduction of 0.10%, but they received a slightly larger cut than expected. This assessment was made by the chief economist for greater China at ING, Lynn Song, who described it as a “slightly stronger-than-expected move.
Anthony Pompliano, an investor in angels, entrepreneurs, and Bitcoin enthusiast, expressed his thoughts on the PBOC’s strategic move. He stated that he anticipates a significant surge of affordable funds into the markets following the Chinese rate cut: “Affordable capital is poised to rush into the market globally.” Furthermore, he noted that asset prices are likely to greatly benefit from this influx.
Mason Carter, a co-founder of Acropolis, expressed his viewpoint on this matter, stating that he anticipates Bitcoin will outperform other market assets.
And Bitcoin is the fastest horse
— Mason Carter (@onchaincowboy) September 24, 2024
A significant number of Bitcoin supporters on platform X anticipate that China’s decision to reduce interest rates could potentially boost Bitcoin prices even more, as they expect this action from China to contribute to the Bitcoin price rise.
🇨🇳 China announces to cut rates.
HERE WE GO #BITCOIN 🚀
— Vivek⚡️ (@Vivek4real_) September 24, 2024
Bitcoin market performance
Over the last seven days following the Federal Reserve’s announcement, Bitcoin, the world’s first cryptocurrency, has experienced a significant rise of approximately 7.51%. At one point during this surge, its value reached over $64,000.
Currently, as we speak, Bitcoin is being traded at approximately $63,875, following a minor dip that occurred earlier today.
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2024-09-24 14:40