China is expected to announce a fiscal stimulus package to support economic growth amid a sharp slowdown in domestic demand. Beijing may also announce spending plans for defense, technology and the private sector, and resume monetary easing that was halted after President Donald Trump’s re-election.
So, how could this move impact the crypto market?
1. How Will China's Money Pump Affect Bitcoin?
If China does indeed restart its economic stimulus packages, this could lead to:
✅ Increase liquidity in financial markets, making it easier for money to flow into riskier assets like crypto.
✅ Weaken the Yuan (#CNY ) against the USD, causing Chinese investors to seek Bitcoin as a safe haven asset.
✅ Creates inflationary pressure in the Chinese economy, which is typically beneficial for scarce assets like BTC.
History has shown that whenever China expands its monetary policy, Bitcoin often benefits from capital inflows into the crypto market.
2. Can China Limit Money Flow Out?
While capital from China may find its way into Bitcoin, the government still imposes strict capital controls. Several scenarios could play out:
China may increase controls on crypto trading, restricting citizens from using USDT or other stablecoins to buy $BTC .
Chinese investors may turn to decentralized channels (#DEX ) or NFTs to move assets abroad.
However, if money can still flow into the market, Bitcoin could benefit from increased risk-on sentiment.
3. Is the Stimulus Package Strong Enough to Push Bitcoin Up?
While economic stimulus could have some positive effects, its effectiveness will depend on its scale and how it is implemented. If China:
✅ Pumping a large amount of liquidity, Bitcoin price may continue to increase in the medium and long term.
✅ Focus on stimulating the technology sector, which can promote the development of blockchain and crypto in China.
❌ With capital controls tightening, the crypto market may not directly benefit from Chinese money flows.
Conclude
China’s impending monetary stimulus could be a factor in driving capital flows into Bitcoin, especially if the yuan continues to depreciate. However, it remains to be seen how Beijing’s capital controls will actually impact the crypto market.