ChainCatcher news, BCA Research believes that the rise in risk appetite may not be sustained as China's latest stimulus measures failed to generate a significant bullish "credit impulse" like the past two decades (including 2015). Between 2000 and 2020, when China's real estate market boom was in full swing, it was possible to introduce an exponential credit curve into the real estate and construction boom. But now, in the absence of alternative destinations for productive uses of credit on the same scale, it will be difficult to generate the same huge rush for credit.
Credit impulse refers to the flow of new credit issued through loans and other debt instruments as a percentage of gross domestic product (GDP). Since the 2008 financial crisis, analysts have been closely watching China's credit impulse as a leading indicator of global economic growth and a rebound in risk appetite. Historically, a renewed rise in the indicator coincides with the bottoming out of the Bitcoin bear market.
During the last major bullish easing cycle in 2015, the credit shock peaked at 15.5 trillion yuan, equivalent to 15% of GDP. At that time, Chinese stocks, represented by the CSI 300, more than doubled in six months, and Bitcoin bottomed out near $100 before moving higher in a two-year bull run that peaked near $20,000 in December 2017.
