China Announces New Stimulus as Economy Faces Trade Tensions and Growth Challenges
According to BTC Peers, China unveiled a series of fiscal and monetary stimulus measures on Wednesday aimed at boosting consumption and addressing trade tensions with the United States. The government has set an ambitious 5% GDP growth target alongside a fiscal deficit target of 4% of GDP for the year.
Bitcoin prices have previously responded to major Chinese economic interventions. Data shows the cryptocurrency gained 12.3% last September when China implemented earlier stimulus efforts, including interest rate cuts and reduced bank reserve requirements.
Analysis from TradingView indicates a positive correlation between Bitcoin prices and the People's Bank of China's balance sheet over the past eight years. This relationship has caught the attention of cryptocurrency investors watching for potential market movements.
Previous Chinese stimulus periods have shown effects across alternative asset markets. According to a Nexo spokesperson, "In previous instances when China has ramped up monetary stimulus and injected excess liquidity into the system, in 2015 and in 2020, excess liquidity found its way into alternative assets."
The stimulus announcement comes as China confronts several economic challenges, including:
- Weak domestic consumption
- A troubled property market with high debt levels
- Increasing pressure from US-China trade conflicts
- Threat of additional US tariffs
Some analysts remain cautious about the stimulus impact. Nansen Principal Research Analyst Aurelie Barthere noted that China maintains "slow positive economic momentum, not a boom," suggesting US policy changes currently exert greater influence on crypto markets.
The United States has meanwhile strengthened its cryptocurrency position. President Trump recently ordered the creation of a "Crypto Strategic Reserve" including Bitcoin, Ethereum, and other major cryptocurrencies, with the government already holding approximately $17 billion in Bitcoin and $120 million in Ethereum.
Brazilian fintech company Méliuz has joined the corporate Bitcoin adoption trend, purchasing 45.72 Bitcoin worth $4.1 million at an average price of $90,926. The board-approved policy allows up to 10% of cash reserves for Bitcoin investments as part of its long-term financial strategy.
