China’s central bank plans for stimulus measures further spurred optimism among investors already bullish about Federal Reserve policy.
The PBOC cut a key interest rate and left the door open for further reductions. It also unveiled measures to stimulate the stock market, along with the property and banking sectors.
Meanwhile, the Fed also signalled an openness to further jumbo rate cuts following its half a percentage point chop last week.
Chicago Fed President Austan Goolsbee said on Monday that the central bank has “a long way to come down to get the interest rate to something like neutral.”
Three experts on what it means for crypto:
Wintermute
“This adds a significant amount of liquidity into global markets — supporting conditions into year-end,” Wintermute wrote of the China measures in a note to clients on Tuesday.
Referring to Fed policy, Wintermute added: “As risk tolerance increases, the cryptocurrency market is well-positioned to benefit from the inflow of risk-seeking liquidity.”
Noelle Acheson
”Too little too late?,” asked analyst Noelle Acheson, noting subdued action from US and crypto markets.
Why?
“Just like US rate hikes didn’t do much to dampen demand, it’s not clear that Chinese cuts will do much to stimulate it,” she wrote of Bitcoin in her “Crypto is Macro Now” newsletter.
“It is surprising that it hasn’t performed better given its sensitivity to liquidity sentiment.”
”The tailwinds for BTC continue to accumulate. The headwinds are still there – US investor sentiment, macro and political uncertainty – but there is pressure against them.”
Arthur Hayes
While he didn’t specifically address recent China or Fed developments, Maelstrom founder Arthur Hayes cited central bank policies generally for his U-turn on crypto prices.
He said he recently changed his mind, turning more bullish in the short term thanks to looser borrowing costs and stimulus.
“As long as our masters attempt to suppress entropy by printing money, crypto will rise in fiat terms,” Hayes told DL News on Tuesday.
“And the Maelstrom portfolio will prosper regardless of whether I get my short-term calls right or wrong.”
Crypto market movers
Bitcoin is down 0.6% over the past 24 hours to trade at $63,143.
Ethereum is down 2.2% over the same period to reach $2,609.
What we’re reading
Inside efforts to get FTX exec Caroline Ellison a short prison stint: ‘She’ll be out inside of a year’ — DL News
How Trump went from ‘crypto saviour to mega cringe’ — DL News
Polymarket Targets $50M Amid 2024 U.S. Election Betting Surge, Token Launch Expected — Milk Road
Celestia Foundation Secures $100M In Funding Round Led By Bain Capital Crypto — Milk Road
Women in Crypto Are Underpaid and Undervalued: 10 Ways to Change That — Unchained
