In the past two days, the A-share market has seen a sharp rise, with the Shanghai Composite Index rising by more than 3.61% and returning above 3,000 points.

This bull market has boosted market sentiment, with multiple sectors experiencing collective surges. Many people are cheering that "the bull market is back."

So, what is the reason for the surge in A-shares this time?

In fact, this rise was driven by multiple factors, with the entry of large funds and the government's economic stimulus policies being the main reasons.

According to a report by Goldman Sachs, hedge fund net buying of Chinese stocks recently hit the second highest level in a decade, and the trading volume of A-shares exceeded one trillion yuan for two consecutive days.

This shows that large funds have entered the market strongly and dominated this wave of market trends.

In addition, the Chinese government has introduced a series of policies to stimulate the economy, such as injecting $142 billion into major banks, with the aim of promoting economic growth and stabilizing market expectations.

These policies have made investors more confident about China's economic recovery, driving a strong rebound in the stock market.

So what impact does the surge in A-shares have on the crypto market?

Simply put, when there is more money in the market, people will generally look for ways to beat inflation.

Cryptocurrencies, especially Bitcoin, are considered a good hedge against inflation, so they tend to do well in this situation.

Historically, whenever a large amount of money flows into the market, the price of Bitcoin usually rises significantly.

Therefore, many people expect that as China launches large-scale economic stimulus measures, Bitcoin and other crypto assets may usher in another round of rise.

Now, more and more Chinese investors regard Hong Kong as an important gateway for cryptocurrency investment.

So, what role does Hong Kong play in cryptocurrency investment?

According to Chainalysis, cryptocurrency usage in Hong Kong has grown 85.6% over the past year.

As Hong Kong relaxes its cryptocurrency policies, it is increasingly becoming a "springboard" for mainland Chinese investors to invest in crypto assets.

Since Hong Kong approved its first Bitcoin spot ETF in April this year, it has been striving to become a global crypto hub, wanting to be on par with places like Dubai and Singapore.

This not only promotes the rapid development of Hong Kong's encryption industry, but also provides a relatively safe investment channel for mainland investors.

What impact will China’s economic stimulus policy have on the crypto market?

In fact, the rise of traditional financial markets often affects the crypto market, especially in the context of the global economy, where capital flows in the stock market and the cryptocurrency market are closely linked.

Despite China’s strict regulation of cryptocurrencies, OTC trading volumes are growing rapidly, according to Chainalysis.

Especially in times of economic downturn, investors tend to shift funds from the depressed stock market to crypto assets for safe havens.

China’s over-the-counter cryptocurrency trading volume has reached $75.4 billion this year, more than triple the same period in 2021.

The rise in Bitcoin prices is also related to the Federal Reserve's interest rate cut news. Many investors believe that the cheap capital brought about by the interest rate cut will further push up the prices of crypto assets such as Bitcoin.

Angel investor Anthony Pompliano said China's massive injection of liquidity will prompt more funds to flow into high-risk, high-return assets including Bitcoin.

This means that the surge in A-shares and China’s economic stimulus policies will not only boost the stock market, but may also drive a rebound in the cryptocurrency market.

Mason Carter, co-founder of Acropolis, also believes that Bitcoin will surpass other assets.

So, what is the future growth potential of the cryptocurrency market?

With large amounts of fiat currency flowing through the global economy, Bitcoin and other cryptocurrencies have become an important destination for these funds.

Since cryptocurrencies are seen as a hedge against market volatility, it is natural for funds to flow into the crypto market.

Historically, the Federal Reserve has responded to economic fluctuations by lowering interest rates to stimulate the economy, which often brings interest rates close to 0%.

This means banks will make more loans and more dollars will circulate in the market.

Regardless of economic conditions, the Federal Reserve is likely to continue cutting interest rates and the government will continue borrowing to support the economy.

As the dollar depreciates, the Chinese government will also take measures to keep the yuan stable and increase credit supply.

Recently, the People's Bank of China has begun to lower interest rates, which is just the beginning and more credit may be released in the future.

If other countries are also easing monetary policy, there will be less pressure on countries like Japan to raise interest rates.

Countries around the world stabilize their economies by lowering the price of their currency and increasing the money supply.

This could be good news for those who have already invested in cryptocurrencies, as their portfolios could see significant upside.

The recovery of the A-share market may also enhance investors' risk appetite, and this sentiment may be transmitted to the crypto market.

Summarize

The recent strong rise in the A-share market is mainly due to the influx of large amounts of funds and the government's economic stimulus policies. This not only boosts the stock market, but may also have a positive impact on the cryptocurrency market.

As more and more funds enter the market, Bitcoin is considered a good tool to fight inflation and is expected to usher in a new round of increases.

Against the backdrop of global money printing, most financial assets are likely to rise in the next one to two years, so we must seize this rare opportunity.