Bitcoin Stagnates After China’s Stimulus Announcement

CoinDesk 20 Index: 2,014.90 +1%Bitcoin (BTC): $63,558.29 +0.07%Ether (ETH): $2,642.62 -0.1%S&P 500: 5,718.57 +0.28%Gold: $2,632.34 +0.23%Nikkei 225: 37,940.59 +0.57%

Bitcoin has been little changed in the past 24 hours, having recovered to around $63,000 after falling to $62,750 in early Asian morning hours.

Ether was similarly unmoved at $2,645. Other leading altcoins were relatively more lively throughout the day, with SOL and DOGE up 1.8% and 1.2% respectively. The crypto market as a whole was up 0.9%.

The People’s Bank of China (PBoC) announced that it has cut the reserve requirement ratio for its banks by 50 basis points and the seven-day reverse repo rate (the interest rate at which a central bank borrows from commercial banks) by 20 basis points to 1.5%.

In addition, the central bank lowered the minimum down payment requirement for mortgages to 15%. Hong Kong’s Hang Seng index rose 3.2% on the news, while the Shanghai Composite index is up 2.3%. Lynn Song, Chief Economist for the Greater China region at ING, wrote that today’s policy package is expected to weaken the yuan, and the USD-CNY exchange rate has risen in response to the PBoC’s easing measures. However, medium-term factors such as interest rate spreads point to a gradual appreciation trend for the CNY.

Ether ETFs recorded their highest outflow since July yesterday, with more than $79 million in outflows from the funds.

The outflows were the highest since July 29, when ETH ETH held a cumulative $98 million, and the fourth-highest since they went live on July 23. Leading the way was Grayscale’s ETHE, which lost $80 million. Bitwise’s ETHW saw inflows of around $1.3 million, while none of the other ETFs showed any activity in either direction.

This suggests that institutional demand for ETH is notably lacking, with the world’s second-largest cryptocurrency seeing a rally of over 10% in the past week.

The chart shows the ratio of the market price of copper per pound to the price of gold per ounce. The ratio rose 2.3% today, setting a positive tone for risk assets including cryptocurrencies following China’s major stimulus announcement. The ratio had fallen sharply in July, signaling risk aversion across the market. Source: TradingView