The market is all green at the start of a new week and a new month. Nearly all top coins are enjoying gains of more than 2% and as high as 15%. The recent pump comes in light of the Chinese markets reopening today. And the government injecting 1.2 trillion yuan ($174 billion) worth of liquidity into the markets. The highest injection in the history of the country. This has triggered the crypto market to soar and extend gains to the second month of the year.
Time To Print $174B
Just like in the U.S a few months ago, China will inject $174 billion via reverse repo operations. During the announcement, the People’s Bank of China added that this would see the total liquidity in the banking system reach 900 billion yuan higher than in the same period last year. The People’s Bank has on its part promised to use various monetary tools to ensure market stability.
“We believe that the successive introduction and implementation of policy measures will play a better role in improving market expectations and preventing irrational behavior,”
The Chinese market was closed on Jan 23 with the escalation of the Coronavirus epidemic. Authorities believed that panic would see the market crash. In the U.S stock, this was evident as the market reached an all-time low since October in January. As the markets re-open today, investors are bracing for the worst volatility.
The Coronavirus opinion has however not been a popular one. Crypto analyst Josh Rager does not buy into the January rally being triggered by the epidemic.
The coronavirus is almost becoming click-bait for crypto content creators
The short answer- $BTC has made no abnormal price changes during the recent panic waves though stocks in China have taken a significant hit
BTC is still ranging between $8k to $9200
— Josh Rager 📈 (@Josh_Rager) January 27, 2020
Investors have been running to the crypto market. Bitcoin is the most popular coin and investors will protect their investment by seeking safe haven in it. Bitcoin is not shaken by world economic trends, in fact, it is driven by this. The crypto community is keen and closely following with optimism on where the crypto market will head next.
⬇️ Global debt $252.6 trillion
⬇️ #China to inject $174 billion liquidity
⬇️ Oil value decreases due to fears from coronavirus outbreak.
⬆️ $BTC up 45%
⬆️ 12.6 million #BTC hasn’t move in a year
⬆️ #Bitcoin hash rate 123,011,832
There’s only an upside ⬆️ with Bitcoin
— cryptoph3r (@cryptoph3r) February 2, 2020
Altcoins have also been pumped and the crypto market as a whole is now headed for the $300 billion market cap mark.
China To Embrace Itself For Tougher Times
China’s economy is expected to continue struggling for the next couple of months. The injection by the Central Bank means that the Yuan will lose value to global currencies. This, in an economy that was struggling. Since 2019, the Chinese economy has been slowing, a first in more than 5 years. Additionally, the country has just come out of a long trade war with the U.S that cost it billions.
All this, economists believe could lead to China’s economic growth dropping below 5% in the first quarter of the year. This will continue to fuel the crypto market.
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