China stops economic stimulus measures! Well-known analysis agency: RMB capital will be "reallocated" to Bitcoin...

FX168 Financial News Agency (Asia Pacific) reported that the well-known analysis agency QCP Capital said in an announcement to subscribers that China stopped its economic stimulus measures, Bitcoin will usher in capital reconfiguration, the cryptocurrency market will benefit from it, and liquidity will see a new increase. However, the agency warned that risky assets still have "short-term downside" risks.

Although the decline in US macro data this week has led to "short-term downside risks" in the stock market, QCP believes that the situation of Bitcoin and the broad cryptocurrency market will soon improve.

Source: CoinTelegraph

"As the momentum of the Chinese stock market rally fades, we expect capital to be reallocated to the crypto space, reflecting the industry's growing maturity as an alternative risk asset," the agency said.

This outlook is consistent with the more optimistic view of crypto market observers for the rest of October and the fourth quarter.

Some still believe that Bitcoin will achieve steady growth in a classic "Uptober" performance, and global liquidity trends will also boost risk assets massively before the end of the year.

"We expect stocks to face downside risks in the near term, as the upcoming earnings season and US Consumer Price Index (CPI) data may challenge the high valuations of stocks, and geopolitical tensions further complicate the outlook for stocks," QCP said.

"However, we maintain a medium-term optimistic stance and expect US November election headlines to continue to drive cryptocurrency movements."

Given the overall trend of Bitcoin prices, traders generally believe that caution is needed on low time frames.

China's economic setback boosted the US dollar index, which is usually a headwind for cryptocurrency performance, and put pressure on US stocks.

Bluntz, a well-known trader, wrote on Twitter: "I think the surge in cryptocurrencies at the beginning of this week may be a trap, as Bitcoin performed strongly over the weekend."

At the beginning of this month, the US dollar index was trading at its lowest level since July 2023, and has risen 1.6% so far this month.

In addition to China's suspension of economic stimulus measures, which may trigger capital reallocation to Bitcoin, the Hong Kong market also received heavy news that 11 virtual asset platforms that were deemed to be licensed are expected to be licensed in batches before the end of the year.

In the latest interview, Liang Fengyi, CEO of the Hong Kong Securities and Futures Commission, said that under the premise of maintaining market fairness, the development of the regulatory system for virtual asset trading platforms will be promoted, the tokenization of traditional products will be supported, and the basic technologies of blockchain and Web3 will be used to promote the establishment of a responsible and secure financial technology ecosystem. "The entire framework will be completed at least next year."

In order to lead the transformation of the financial market, Liang Fengyi said that it is necessary to embrace financial innovation and promote the development of the regulatory system for virtual asset trading platforms. The Securities and Futures Commission has issued the third license, and another 11 platforms are applicants who are deemed to be licensed. The first phase of on-site review has been carried out, and requirements have been put forward for these applicants to make rectifications. The goal is to have new progress before the end of the year, including batch licensing. Applicants who do not meet the requirements will lose their license qualifications, and applicants who meet the requirements will be conditionally licensed.

Regarding cryptocurrency over-the-counter (OTC) services, Liang Fengyi pointed out that the Hong Kong Securities Regulatory Commission has sought industry opinions on the formulation of a new licensing system for cryptocurrency over-the-counter services and cryptocurrency custody services, and will also promote the development of a regulatory system for virtual asset trading platforms.