Swiss financial powerhouse UBS forecasts a significant shift in investor preference from cryptocurrencies to traditional assets, triggered by China's aggressive fiscal stimulus initiative. According to UBS, Beijing's proposed fiscal stimulus, which could total between RMB 1.5 trillion to RMB 2 trillion, is set to draw significant capital away from digital currencies.
Wang Tao, UBS's Chief China Economist, anticipates the actual amount could be substantially larger, possibly reaching up to RMB 10 trillion, representing up to 8% of China's GDP. This financial injection is primarily aimed at revitalizing the faltering real estate sector, which is crucial for bolstering corporate and consumer confidence and stabilizing the economy.
The timing of these measures is strategic, with the initial phase expected to roll out shortly after China's National Day, complementing the release of third-quarter economic data on October 18. With additional fiscal expansions anticipated in 2025, UBS predicts this could catalyze economic growth by about 5% over the next couple of years. This move could mark a pivotal shift in investment strategies globally, impacting the cryptocurrency markets as funds flow into more traditional avenues

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