[Weekly Briefing for the 5th week of September] The US is loosening its purse strings, China is loosening its purse strings too… A sign of a Bitcoin rally?

The last week of September saw Bitcoin's price rise by around $2,000 compared to the previous week, creating a solid price trend without any significant correction. In the past one or two months, altcoins that had not shown any significant upward movement due to the volatile Bitcoin price movements have also shown a strong bullish trend. As explained in the previous week's weekly briefing, the reason for the rise was simple. The US Federal Reserve (Fed) carried out a 50bp rate cut despite various favorable economic conditions, leading to increased expectations of increased market liquidity. While there were concerns about a sudden deterioration in the US employment situation and the economy, the initial jobless claims on Friday, September 26th, and the personal consumption expenditure (PCE) price index released on September 27th, both came in below expectations, allowing Bitcoin's price to maintain a solid bullish trend. The price reacted to the indicators, but there were also hidden positive factors that shaped the market sentiment last week. First, in the US, Kamala Harris, the current Vice President and Democratic presidential candidate, said in a public appearance on September 23rd that if she becomes president, she will "strengthen the development of cryptocurrencies and artificial intelligence (AI)". This was the first time Harris has made a statement promoting cryptocurrencies. Two days later, on September 25th, Harris mentioned cryptocurrencies again while discussing her economic policy proposals at a public rally. She emphasized that "the US must maintain a dominant position in emerging technology industries such as blockchain, AI, and quantum technology." Following the US in lowering interest rates, China also announced on September 26th that it is considering injecting up to 1 trillion yuan (about $142 billion) of liquidity into the banking system to prevent economic growth from slowing down. Along with the US, which had maintained a high interest rate of over 5% for a long period after the COVID-19 situation, China is also embarking on "money printing". Those who have been investing in cryptocurrencies for a long time know well that the Chinese government's liquidity injection policies have historically had a significantly positive impact on Bitcoin's price. Experts are particularly focused on the fact that China's economic situation is in such a risky state that it requires rapid and large-scale stimulus measures. They estimate that there is an 80% probability that such a situation will lead to an upswing, and a 20% probability of a downturn. Accordingly, BlackRock, which owns the largest Bitcoin spot exchange-traded fund (ETF) in the US, IBIT, is actively working to rehabilitate Bitcoin's identity as a risky asset that has shown a high correlation with the Nasdaq index in recent years. Robby Mitchnick, BlackRock's digital asset manager, said on September 26th that "Bitcoin is not tied to the economic power or policies of any particular country" and is a "safe asset that is not greatly affected by general risks such as currency devaluation and political turmoil." Proving this situation, on the last trading day of last week, September 27th, about $500 million in net inflows were recorded for US Bitcoin spot ETFs, the highest in the past two months. The weekly net inflow was around $1.11 billion. Will this buying pressure continue this week? The basic liquidity trend is expected to be maintained. However, there are major events this week that investors need to pay attention to. The most important schedule this week is the employment data released from October 1st to 4th. On October 1st, the US Department of Labor's Job Openings and Labor Turnover Survey (JOLTS) for August will be released, followed by the US ADP non-farm employment report for September on October 2nd. Then, on October 3rd, the US initial jobless claims will be announced, and on October 4th, the September non-farm payrolls and unemployment rate will be released. If the employment data does not show a significant deterioration and maintains a solid trend, Bitcoin's price is likely to show a strong performance like the past two weeks. While less important than the employment data, the ISM manufacturing and services purchasing managers' indices, which indicate the US economic trend, are also worth watching. If indicators continue to show that the US economy is still robust, it will have a positive impact on Bitcoin.