Bitcoin Bounces 7% Above $63K as Crypto Traders Eye China Stimulus Statement

Bitcoin, currently the largest cryptocurrency by market value, experienced a 7% increase from its Thursday low of around $59,000, spurred by the release of a higher U.S. Consumer Price Index (CPI), which goes against the general trend this week of losing gains during U.S. trading hours. In the last 24 hours, Bitcoin has climbed 5.5%, outperforming the broader CoinDesk 20 Index’s (CD20) 4.7% growth.

Leading altcoins such as Solana, Avalanche, and Render saw impressive gains between 6% and 8%. However, Uniswap was the exception within the CD20 index, experiencing a slight decline in its value, reversing some of the growth it achieved on Thursday. This dip was likely due to Uniswap’s announcement to launch its own layer-2 network, which initially boosted its price.

In the same period, cryptocurrencies surged while stocks also reached new peaks, with both the Dow Jones Industrial Average and S&P 500 ending the week at record levels. The U.S. dollar index momentarily halted just below 103 after experiencing a sharp increase over the previous week due to traders revising their assumptions about additional Federal Reserve interest rate decreases in response to robust U.S. employment data and higher inflation indicators.

The stocks related to cryptocurrency also mirrored a favorable outlook. Notably, Bitcoin mining companies such as MARA Holdings (MARA), Riot Platforms (RIOT), and Bitdeer (BTDR) experienced gains of around 5% to 10%. Additionally, the significant U.S. crypto exchange, Coinbase (COIN), closed the day with a 7% increase.

Shares of MicroStrategy (MSTR), a company that owns almost $16 billion worth of Bitcoin, rose by 16% and reached their highest point since March 2000. The gap between the company’s share price and the value of its Bitcoin holdings is currently the widest it has been since 2021.

China fiscal policy update may move crypto

The focus on macroeconomic elements affecting cryptocurrency prices has moved from monetary policies towards the results of the U.S. election, according to the analysis provided by David Duong and David Han from Coinbase in their latest report.

The key catalyst for crypto volatility might be the upcoming China fiscal policy update by the finance minister slated for early Saturday UTC. Investors anticipate more financial stimulus for the ailing Chinese economy and financial markets, which could reverberate in the digital asset market, the Coinbase report noted.

In simple terms, the authors suggested that since traditional markets are likely to be closed during the upcoming briefing, traders may choose to voice their opinions about the scale and potency of China’s fiscal statements by investing in cryptocurrency markets instead.

According to Markus Thielen, the founder of 10x Research, the latest U.S. economic data indicates a robust economy and job market, easing previous worries about an immediate recession.

According to Thielen, this situation seems to favor investments in riskier assets as we approach the end of the year. Even small triggers might push cryptocurrency prices up significantly. He also suggests that a substantial shift is imminent, and careful traders are likely to seize this opportunity effectively.