chinese governmentThe economic incentive packages recently announced by Turkey have revived the stock market, which has been weak for a long time. However, according to some experts, this revival has a negative impact on the cryptocurrency market. Bitcoin 
$63,272 One of the factors limiting the rise in Asian markets and other Asian markets may be the shift of capital to Chinese stocks.
The Rise in the Chinese Stock Exchange Affects the Cryptocurrency Market
Recently chinese stock market experienced a strong recovery. In particular, the Shanghai Composite Index has risen by over 20 percent since September 24 and reached the highest level since May 2023. Includes Chinese stocks listed in Hong Kong Hang Seng China Index increased by over 25 percent. This rise came after the Chinese government announced a major stimulus package. Steps such as interest rate cuts, liquidity support to banks and promises to support real estate prices mobilized investors. However, some of this capital flow appears to be withdrawing from the cryptocurrency market.
From Singapore-based Atlantis Investment Management Eric Yeestated that they reduced their long positions in other Asian stock markets to invest in Chinese stocks. So the earning potential in China attracts investors and this Bitcoin It reduces interest in risky assets such as
Capital May Return to the Cryptocurrency Market
On the other hand, some experts think that this situation is temporary. Co-founder of Digital Assets Association Singapore Danny Chongthis capital shift will not last long and when the activity in the Chinese stock market calms down, investors cryptocurrencyHe stated that he would return to them. “Investors are trying to maximize their returns by switching between asset classes,” Chong said. “When Chinese stocks reach their peak, we can see that capital turns to the cryptocurrency market again,” he said.
But traditional market analysts Chinese He argues that the government’s latest incentives may not be effective in the long run. They state that these measures will remain limited unless economic problems are radically addressed.
It is thought that the incentives will not be sustainable in the long term, especially if the damaged balance sheets of the banks are not corrected. For this reason, there are warnings that the current rise may be a short-term movement and may not be permanent unless China’s real economic problems are solved.
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.
