Bitcoin's future is tied to global politics and money policies. The U.S. was expected to lead on bitcoin reserves. However, China may cause a huge economic shift. Beijing's actions hint at a large amount of money entering the crypto world, possibly $1.4 trillion. This plan may aim to stabilize China's currency and avoid U.S. sanctions.
China's economy shows signs of recovery. This could affect more than just regular markets. China's central bank governor, Pan Gongsheng, mentioned possible interest rate cuts. He also noted injecting money by lowering bank reserve needs. This comes as China faces trade problems made worse by Trump's policies. These policies risk a global trade war.
Last November, China announced a $1.4 trillion plan. It was to support local governments and keep its economy stable. Nexo platform noted that in 2015 and 2020, China eased its money policy. The money often went into other assets. It's possible that this new money could help cryptocurrencies, especially bitcoin.
Some believe Beijing might create a bitcoin reserve. David Bailey, CEO of Bitcoin Magazine and an advisor to the Trump campaign, mentioned this. He said there have been private meetings about it since the election.
If true, China could pass the U.S. Trump has said he wants a national bitcoin reserve. China would then use bitcoin as a tool. It would offset limits set by the U.S.
This would greatly change things. A Chinese state bitcoin reserve would disrupt the market. It would also boost bitcoin's acceptance as a key asset.
Arthur Hayes, co-founder of BitMex, warned to watch China. He predicted a final crisis in the regular money market. After this, the U.S. would boost the economy and push bitcoin past $1 trillion. If China buys a lot of bitcoin, it could speed up this change. It could also legitimize crypto as a reserve asset.
China's moves are more than economic adjustments. They could reshape global money power. China, once against cryptos, now seems to include bitcoin in its plans.
If China adds bitcoin to its reserves, it would create scarcity. This would likely increase its price. It would also start a new chapter in the U.S.-China competition. Financial power would then include cryptocurrencies, not just traditional money. Bitcoin could then be seen as protection against inflation.
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