The possibility of former US President Donald Trump's victory could have a particularly significant economic impact in China as the US presidential election becomes more heated.
In preparation for this, the Standing Committee of the National People's Congress (NPC) of Beijing plans to hold a meeting from November 4 to November 8 to discuss a historic 10 trillion yuan (about $1.5 trillion) fiscal package.
China to Discuss Additional Fiscal Support Next Week
According to Reuters, the NPC Standing Committee will discuss raising over 10 trillion yuan through special government bonds and local government bonds. This package is expected to allocate around 6 trillion yuan to alleviate local government debt and up to 4 trillion yuan for the purchase of idle land and real estate.
"The NPC Standing Committee meeting is scheduled from November 4 to November 8," reported CN Wire.
This discussion will start on the eve of the US election and be completed after the 47th president is decided. The proposed stimulus package aims to inject essential liquidity into the economy. According to general opinion, the NPC's planned measures could be accelerated if Trump wins, adding financial uncertainty to the already unstable Sino-US relations.
Read more: How to Protect Yourself from Inflation Using Cryptocurrency
This package follows initial reports of China's $142 billion fiscal support. According to BeInCrypto, some analysts speculated that the initial support could trigger a BTC bull run. Now, observers believe the expanded $1.5 trillion effort could amplify this effect.
This economic stimulus could channel liquidity beyond traditional markets into cryptocurrencies, potentially accelerating the upward momentum of BTC.
Crypto Analysts: "China Liquidity Will Lift Bitcoin Price"
The cryptocurrency sector has reacted positively to China's proposed stimulus. Renowned crypto analyst Kyle Shaughnessy tweeted, "The money printer is going parabolic." This post reflects the perception that the influx of liquidity could drive up the price of BTC.
According to social media reactions, the combination of a Trump victory and China's massive fiscal stimulus could lead investors to seek alternative assets like BTC. This is particularly the case as trust in fiat currencies weakens globally.
Arthur Hayes, co-founder of BitMEX, shares this positive outlook. In a recent blog post, Hayes argued that China's anticipated quantitative easing (QE) will trigger a BTC price surge. He is particularly optimistic about BTC's performance amid currency devaluation, noting that few assets perform as well as BTC during such periods.
"Asset classes like currency devaluation don't perform as well as BTC... The more fiat currency is created, the higher BTC will go," he wrote in his blog.
Arthur Hayes expects investors to perceive BTC as a hedge and transfer capital to digital assets to preserve purchasing power. BTC is currently approaching its all-time high of $73,777, outperforming traditional assets like gold, the S&P 500, and real estate, highlighting its appeal as an inflation-resistant investment.
China's increased liquidity could make BTC particularly attractive to investors concerned about fiat currency devaluation. This trend of "safe-haven asset demand" sees investors shifting to alternatives that provide protection against inflation. As liquidity flows into the Chinese economy, there may be increased demand for assets that bypass the yuan or the dollar.
The NPC's fiscal package discussions, concurrent with the US election, could further highlight BTC's appeal. However, Beijing's stance on BTC remains cautious. China banned the direct exchange of the yuan for BTC in 2017, but local traders have since adopted P2P solutions to convert yuan to BTC.
Platforms like Binance and OKX support these P2P exchanges, providing discreet channels for BTC trading that bypass traditional trading pairs. This "Sino-LocalBitcoins" workaround, as Arthur Hayes calls it, underscores the adaptability and continued interest of Chinese traders in cryptocurrencies.
Analysts believe China's underground BTC market could thrive amid economic instability, particularly as Beijing's QE looms. Hayes noted Beijing's cautious approach, limiting mainland investment in Hong Kong-based BTC ETFs to control capital outflows and maintain control over financial markets.
Read more: Why Hong Kong's Spot Crypto ETF Matters
The cryptocurrency community is currently watching whether the US election outcome and China's massive liquidity injection could propel BTC back into a bull market.
