The People’s Bank of China Cuts Reserve Requirement Ratio, Crypto Prices Unmoved

The People’s Bank of China recently took steps to stimulate the economy by cutting the reserve requirement ratio for mainland banks by 50 basis points. This move, however, had little impact on crypto prices. While Asian stocks rallied in response to the news, with Hong Kong’s Hang Seng index climbing 3.2% and the Shanghai Composite index adding 2.3%, Bitcoin remained relatively unaffected.

Rick Maeda, a research analyst at Presto Research based in Singapore, noted that Bitcoin’s lack of response to the news highlights its current beta being more closely tied to Fed policy and U.S. markets. This is further emphasized by the near two-year high correlations with U.S. stocks, especially following last week’s FOMC meeting.

Despite the positive response from Asian markets, Bitcoin’s price movements continue to be influenced by factors beyond just local economic policies. The cryptocurrency market remains closely intertwined with global economic trends, particularly those in the United States.

As Bitcoin and other cryptocurrencies navigate through these complex market dynamics, it will be important for investors to closely monitor not only local economic policies but also global trends that can impact their investments.