The People’s Bank of China (PBOC) Governor Pan Gongsheng revealed several measures aimed at boosting the economy. Following the announcement, Bitcoin and Ether saw slight declines, while local stock indices surged.
China’s Economic Stimulus Measures
China unveiled new measures to support its economy, including a 50-basis point cut in the bank reserve requirement ratio and a 20-basis point reduction in the seven-day reverse repo rate to 1.5%. Additionally, the minimum down payment for mortgages was lowered to 15%.
Cryptocurrency Market Reaction
Following the announcement, Bitcoin pared its weekly gains, dropping to $62,700 after hitting a nearly one-month high of $64,500 earlier. Over the past 24 hours, BTC dropped 2.2%, while major cryptocurrencies like Ether, BNB, XRP, and Solana saw losses up to 1.8%. The CoinDesk 20 Index fell 1.8%, whereas Celestia’s TIA token jumped 17% after raising $100 million to support its ecosystem.
Stock Market Reaction
Unlike digital assets, regional stock indices saw significant gains. The Hang Seng index in Hong Kong surged 3.2%, and the Shanghai Composite index rose 2.3%. Lynn Song, Chief Economist for Greater China at ING, noted that the PBOC's policy package might weaken the yuan, but a gradual appreciation is expected in the medium term.
The PBOC’s policies have had a notable impact across various financial market segments. While cryptocurrencies showed mixed reactions, the region’s stock indices experienced significant growth, indicating strong investor interest in equities.
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