Questionable: China Stimulus and Multiple Bullish News Fuel Crypto Gains

Bitcoin surged to its highest level in two weeks following mixed reactions to China’s latest stimulus efforts, fueling speculation that investors would turn to cryptocurrencies instead of Chinese equities, Bloomberg reported Monday.

China’s bid to revive its slowing economy through fiscal stimulus left many investors uncertain, as the weekend policy update did not clearly define the amount of stimulus that would be injected into the market. Caroline Mauron, co-founder of Orbit Markets, a digital asset liquidity provider, explained the market dynamics, stating:

Markets are probably taking a disappointing China stimulus to be positive news for bitcoin, as capital rotation from bitcoin into Chinese equities was understood to be previously weighing on crypto prices.

This suggests that the lack of clarity in China’s economic measures may be prompting investors to move their capital into alternative assets like cryptocurrencies rather than risking Chinese stocks, which have seen a world-leading rally start to falter.

In addition to China’s stimulus efforts, the U.S. presidential race is contributing to cryptocurrency gains. Prediction markets have recently shifted in favor of Republican candidate Donald Trump, who is considered pro-crypto, raising his chances of winning over Democratic candidate Vice President Kamala Harris.