- Analysts say that China will announce new fiscal stimulus measures on Saturday, which could inject new liquidity into risk assets including cryptocurrencies such as Bitcoin.
- The US presidential election odds on Polymarket now show Trump with a 55.5% chance of winning, while Harris has 43.7%, suggesting a Trump victory could lead to a significant rise in the Bitcoin price.
According to multiple analysts, Bitcoin and the broader cryptocurrency market may benefit from the next round of fiscal stimulus measures that China is set to announce on Saturday. The State Council Information Office said that Chinese Finance Minister Lian Wanan will provide details on "increasing" fiscal stimulus policies at a press conference on Saturday.
analysts point out that China's stimulus plan has become a focus for the cryptocurrency market, as the injection of broader new liquidity could be positive for risk assets like cryptocurrencies.
analysts told The : "We expect the large amount of liquidity injected into the market to be reflected in all risk assets, including cryptocurrencies."
Analysts added that the specific scale and scope of China's stimulus plan may still surprise the market, and any expected impact is not yet fully reflected in prices. "Especially if the measures are larger in scale or more aggressive than expected."
Increased Bitcoin market volatility is expected
analysts added that while Bitcoin market volatility has recently declined, this digital asset may respond positively to major macroeconomic developments from China. They said: "Even if the stimulus is somewhat expected, the actual announcement could still lead to a temporary spike in volatility as traders adjust to the details of the stimulus plan."
Alex Tapscott, Managing Director of the Digital Asset Group, also emphasized that China's interventions in the financial and real estate markets, aimed at supporting asset prices and stimulating the economy, could drive buying demand in the cryptocurrency market.
Tapscott said in an email to The : "Easing monetary and fiscal policy will boost risk assets, and cryptocurrencies may benefit as a result."
Beijing announced a series of economic stimulus measures at the end of September aimed at lowering borrowing costs and stimulating economic activity. These measures include lowering existing mortgage interest rates by 0.5 percentage points and reducing bank reserve requirements to encourage lending.
The increased liquidity from China's fiscal stimulus, combined with the possibility of further rate cuts by the Federal Reserve, could boost global risk assets, including the cryptocurrency market. This is reflected in the MSCI ACWI index, a global stock index representing large and mid-cap stocks in 23 developed and 24 emerging markets, which recently hit a new all-time high after the Federal Reserve's first rate cut in September 18 and China's recent economic stimulus activity.
Increased global liquidity is correlated with Bitcoin bull market trends
In an independent report by ETC Group, analysts noted that global money supply has reached historic highs, a trend that has historically correlated with Bitcoin's bull market trends. They highlighted three key catalysts that could drive Bitcoin higher in the coming months: supply dynamics from the Bitcoin halving cycle, global economic recovery stimulated by monetary policy shifts, and the upcoming US presidential election.
The report also mentioned the US election, with betting markets like Polymarket showing Donald Trump leading Kamala Harris 55.5% to 43.7%. Analysts said: "If the US election were held today, a Trump victory could mean a roughly 10.7% increase in the Bitcoin price, while a Harris victory could lead to a 10.5% drop in the Bitcoin price, based on historical sensitivities."
The ETC report noted that Bitcoin's performance has been relatively strong after the US presidential elections in 2012, 2016, and 2020, regardless of which party won. The report still mentioned that this is the first time crypto assets have been explicitly discussed in the actual discourse, so it may have a more significant impact on Bitcoin prices.
According to The 's Bitcoin price data, Bitcoin has been trading relatively flat over the past 24 hours, currently priced around $61,277.
