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China Strengthens Support for Crypto Markets with Strategic Actions

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by Giorgi Kostiuk

3 hours ago

Amid cryptocurrency market volatility, China takes steps to support risk assets through economic incentives.

China and Cryptocurrency

China is preparing a favorable environment for risk markets by increasing economic incentives. Arthur Hayes, one of the founders of BitMex, recently emphasized in his blog to pay attention to China.

Xi Jinping aims to keep the yuan stable against the dollar, regardless of circumstances. If the dollar supply increases, he can instruct the People’s Bank of China to boost yuan supply to maintain the dollar-yuan exchange rate.

China's Monetary Expansion

This week, People’s Bank of China President Gongsheng announced rate cuts and reduced reserve requirements for banks, aiming to increase liquidity and support risk markets, which is crucial for cryptocurrencies. A spokesperson from Nexo highlighted past scenarios.

In previous instances when China increased monetary incentives and injected excessive liquidity, as seen in 2015 and 2020, alternative assets became more attractive. Such incentives can have broader effects on global markets, increasing appetite for stocks and alternative assets.

China and Bitcoin Reserves

China is considering establishing strategic Bitcoin reserves amidst the U.S.’s global activities. Recently, BTC Inc CEO David Bailey claimed that China is holding closed-door discussions on this matter.

They have been having discussions behind closed doors regarding this matter since the election.

China's strategic moves could significantly impact global crypto markets, creating a favorable environment for risk investments and supporting interest in alternative assets.

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