Bitcoin $63,645 This week it gained value and exceeded the threshold of 65 thousand dollars. The rise is driven by the rise in the stock market, positive US labor market data and China’s economic stimulus measures.
Rally in the Stock Market
Bitcoin’s rise was primarily driven by the general rally in the stock market. Positive labor force data in the US supported the markets by increasing investor confidence.
China’s Economic Incentive Steps
On the other hand, China lowered interest rates and increased bank liquidity in order to stimulate the economy. In addition, deflation is being combated by housing incentives and the creation of a stock stabilization fund. The People’s Bank of China said in a statement: “China will reduce the reserve requirement rate by 50 basis points, providing over 1 trillion yuan of liquidity to the market.”
The Relationship Between Bitcoin and Global Liquidity
Bitcoin’s long-term correlation with global liquidity is quite strong. This correlation shows that Bitcoin tends to gain value when liquidity increases. “Data reveals that Bitcoin’s correlation with liquidity is higher than gold and stocks,” said macroeconomic analyst Lyn Alden.
China’s efforts to increase liquidity could contribute to Bitcoin’s long-term rise. However, in the short term, Bitcoin price movements may be affected by more crypto-specific factors. Bitcoin’s current upward trend provides an important opportunity for investors to observe the relationship of cryptocurrencies with economic indicators.
Market observers predict that Bitcoin’s value may continue to rise due to the ongoing impact of economic data in China and the United States.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
