China aims to increase consumption and reduce the effects of the escalating trade war with the United States with the new fiscal and monetary incentives it announced on Wednesday. The central bank's such incentive measures are expected to increase global liquidity and spread this liquidity to various risky assets, including Bitcoin. Bitcoin, which rose by 12.3% in September 2024, has recently shown one of its best September performances. TradingView data also confirms a positive correlation between Bitcoin prices and the balance sheet of the People's Bank of China over the past eight years. Experts point out that China's new 300 billion yuan stimulus package could have a positive impact on Bitcoin by increasing global liquidity.

The Cryptocurrency Market is Following the Stimulus Policies of Major EconomiesChina's monetary and fiscal stimuli are creating new expectations in global markets. A study by S&P Global found that both the rise and fall trends in the cryptocurrency market occur during loose monetary policies and significant tightening periods. The rise of Bitcoin in September paralleled China's previous stimulus efforts. The country's reduction of short-term interest rates and reserve requirements for banks to support the housing and stock markets had a positive impact on the crypto market.A spokesperson for Nexo highlighted the potential implications of China's latest stimulus for alternative assets. The spokesperson said, "In previous instances where China increased monetary stimuli, such as in 2015 and 2020, excessive liquidity flowed into alternative assets." The spokesperson also warned about China's strict regulatory controls limiting direct participation in the cryptocurrency markets, stating, "State-backed alternatives could absorb some of the liquidity or flow into traditional safe-haven assets such as gold." China's annual government work report announced a 5% GDP growth target, a fiscal deficit target of 4% of GDP, and various measures focusing on increasing private consumption.