Bitcoin Surpasses $97,000 as China Pumps $138 Billion Liquidity Into Economy
Bitcoin (BTC) continued its strong rally, surpassing $97,000 in trading on Wednesday, as China unexpectedly announced a 1 trillion yuan (~$138 billion) monetary stimulus package. The move came amid signs of cooling trade talks between the US and China, raising hopes of a truce in the global tariff war.
PBOC Boosts Markets: Bitcoin Reacts Quickly
Spurred by the announcement from People's Bank of China (PBOC) Governor Pan Gongsheng that the reserve requirement ratio will be cut by 0.5 percentage points, financial markets were quick to react positively. The move is expected to unleash up to 1 trillion yuan – or $138 billion – of long-term liquidity into the Chinese economy in an effort to stimulate growth and stabilize the market.
Immediately after the announcement, Bitcoin surged, hitting an intraday high of nearly $97,400, bringing BTC’s total market capitalization to $1.93 trillion. However, shortly after the US Federal Reserve’s FOMC meeting, Bitcoin corrected slightly to $96,000 before rebounding to around $96,500.
FED’s “silent money injection” – A sign of monetary policy easing?
While it did not specifically announce quantitative easing (QE), the Fed quietly bought back nearly $15 billion worth of 10-year government bonds in two days, a clear sign that the US is also pumping more liquidity into the financial system.
The move was hailed as “extremely positive” for Bitcoin by crypto experts, including Arthur Hayes, former CEO of BitMEX. According to Hayes, as governments continue to print money and weaken fiat currencies, scarce assets like Bitcoin will emerge as a new safe haven in times of uncertainty.
Geopolitical Play: Trade War Eases, Markets Rebound
The US-China trade tensions, which have been ongoing since 2018, have cost both economies billions of dollars and caused strong volatility in global markets. However, recent signs suggest that the two powers are looking for a detente. The first high-level meeting between the two sides since the height of the tariff war is expected to be a key catalyst, sparking optimism in financial markets, including crypto.
FED Statements Could Shape Upcoming Market Trends
All eyes are on Fed Chairman Jerome Powell’s upcoming speech later this week. Given his pivotal role in shaping US monetary policy, any signals from Powell – whether metaphorical or direct – could have a strong impact on BTC prices and the entire digital asset market.
Summary
As China and the US simultaneously “loosen” monetary policy to revive growth, Bitcoin – with its limited supply and decentralized nature – is emerging as an attractive alternative asset. The combination of geopolitical factors, global capital flows, and monetary policy expectations continue to be a strong catalyst for BTC to maintain its leading position in the digital asset space.