- Bitcoin surged to $97,000 amid China’s $138 billion stimulus and speculation of U.S. Federal Reserve’s quantitative easing.
- It later retreated to $96,500 as traders await further clarity from the Fed.
Bitcoin Brief Surge Above $97,000
Bitcoin (BTC) soared to an impressive $97,000 on Wednesday, capturing market attention before retreating to the $96,000 range. The rally was driven by two major factors: China’s announcement of a $138 billion liquidity injection and growing speculation that the U.S. Federal Reserve may be heading towards another round of quantitative easing (QE).
China’s $138 Billion Liquidity Boost Sparks Optimism
China’s decision to inject around $138 billion into its economy sparked a wave of optimism across global markets. The People’s Bank of China (PBOC) announced interest rate cuts and reduced the reserve requirement ratio by 0.5%, releasing approximately 1 trillion yuan ($138 billion) in long-term liquidity. This move is seen as a clear signal of China’s commitment to supporting economic growth, leading to a surge in risk-on sentiment among investors.
Fed’s QE Speculation Adds to Bitcoin’s Momentum
On the other side of the globe, the U.S. Federal Reserve’s recent bond purchases totaling $34.8 billion have fueled speculation of a potential return to QE. With $14.8 billion spent on 10-year Treasury notes and $20 billion on 3-year notes, the market is closely watching for further signs of monetary easing. Former BitMEX CEO Arthur Hayes has even predicted that Bitcoin could reach $250,000 by 2025 if the Fed fully embraces QE.
What’s Next for Bitcoin?
As of this writing, Bitcoin is trading around $96,500, showing a slight pullback after its brief surge. The market remains on edge as traders await further clarity from the Federal Reserve. A clear signal of QE could drive Bitcoin higher, while hesitation or mixed signals may lead to further volatility.
Investors should keep a close eye on developments in both China and the U.S., as their economic policies will likely continue to influence Bitcoin’s price movements in the coming days.
