China To Drive Next Rally in Bitcoin, Gold Prices, Here’s How?
Highlights
- Bitcoin and Gold might benefit from liquidity overflow from China
- Market expert Dan Tapiero forecasted Quantitative Easing in China's Real Estate sector
- The move is positive for global liquidity and risk assets
The potential outlook of China’s economy with speculations of Quantitative Easing (QE) in the region’s real estate sector is likely to impact on Bitcoin (BTC) and Gold prices and liquidity in the coming months.
Bullish China Economy Looms
According to Dan Tapiero, the Founder and CEO of 10T Holdings, a significant capital accumulation in the Chinese market may be around the corner. Recall how China’s real estate sector sank a few years ago with China Evergrande at the spotlight but was saved by the government at the time.
All of a sudden, the Chinese government is considering the implementation of QE to encourage the borrowing efforts of real estate companies in China. To put this in perspective, the QE is a situation-based economic measure that might allow liquidity-strained Chinese real estate developers to access more funds.
The perk of utilizing this measure lies in its ability to jumpstart businesses. However, this does not negate the strain that the release of capital could put on fiat currency. A flooded economy (in terms of liquidity) can directly contribute to the devaluation of the yuan.
Tapiero believes that this move would be “very bullish for global liquidity”. If this becomes the case, it could serve as a catalyst for Bitcoin as well as other assets that are perceived as hedge against inflation like Gold.
He highlighted that the “explosive upmove in Chinese Real Estate stocks after DECADE+ long bear mkt” translated to a lot of pain. Based on Tapiero’s projection, Silver, Ethereum and even the Nasdaq would not be left out of the possible boost that could happen.
Crypto Enthusiasts Perceives Bitcoin as Hedge Against Inflation
Bitcoin’s consideration as an hedge against inflation is fast gaining traction in different economies. The release of the United States Consumer Price Index (CPI) by the Labour Department two days ago, revived the subject one more time and this time around, China’s real estate QE.
Bitcoin price is currently at $66,450.96 with a 0.89% increase in the last 24 hours. The speculation is that the potential burst of activities in the ecosystem of the flagship cryptocurrency due to the sudden growing interest in the coin could drive its price to new levels.
However, it is necessary not to downplay headwinds that may show up along the line owing to unpredictable market volatility.
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