In an attempt to lift market sentiment, China has dumped cash totaling over 810 bln Chinese yuan – about $130 bln – into its economy over five days. This is a move to solidify the economy of the country and boost the nation’s supply, but they may have just helped their biggest enemy.
The Chinese government, since its shock ban on Bitcoin exchanges and ICOs, has been concerned with trying to keep capital in the country and thus seen it prudent to quash Bitcoin and other cryptocurrencies.
However, the cryptomarket in the Asian country has found ways to stave off the killing blow from regulators, and this most recent move could actually benefit the hungry Bitcoin investors still prevalent in China.
The extra liquidity came about thanks to repurchase deals. This sees the Central Bank buying securities from commercial banks as they agree to sell them again in the future. This capital is now floating around, quite liquid, in the economy, and there is no doubting it will join the Bitcoin revenue stream.
Nomura analysts said in a note, adding that the market is pricing in maintenance of a prudent monetary policy stance: […]