PBoC’s Strategic Shift in Bond Acquisition
The Bank of China‘s Recent Policy (PBoC) halted its government bond acquisitions, signaling a major policy shift. This decision stems from an imbalance between supply and demand, compounded by a devaluation of the yuan. The move is expected to introduce new challenges, possibly influencing Bitcoin and other crypto-assets negatively.
The immediate financial reaction was swift. Yields on Chinese government bonds climbed, with the five-year rate increasing by eight basis points. The ten-year rate followed, rising by four basis points to 1.675%. These shifts reflect a recalibration of investor expectations. Previously, the PBoC’s bond acquisitions were viewed as a stabilizing factor that supported risk-on assets, including cryptocurrencies.
Bank of China’s Recent Policy : Impact on Bitcoin and Crypto-Assets
The tightening of monetary policy by the PBoC projects a cautious outlook for Bitcoin and related assets. A less favorable economic environment for risk-on assets could push Bitcoin’s trajectory downward. However, Bitcoin’s global nature makes it resilient to singular economic policies. Will it have an impact of Korean relations about this subject ?
Interestingly, while Mainland China maintains a strict stance on cryptocurrencies, Hong Kong adopts a more progressive approach. As a special administrative region, Hong Kong actively regulates Bitcoin and its associated industries. This could provide a supportive counterbalance, fostering potential growth for cryptocurrencies in the region.
