Chinas monetary policy shift could spur Bitcoin rally in 2025
Is the next Bitcoin bull market led by China?
In 2025, the People’s Bank of China (PBOC) plans to lower interest rates and transition from "quantitative targets" to prioritizing the role of interest rate adjustments. Veteran Bitcoin enthusiasts eye Chinas monetary policy shift as a potential catalyst for a Bitcoin moonshot
Key takeaways
- Practically, this gives Chinese banks and financial sector companies more flexibility in managing treasury assets.
- These reforms coincide with active U.S. discussions about establishing national bitcoin reserves.
- China, along with the U.S., is one of the largest holders of bitcoin among global governments.
- If China intensifies its involvement in the crypto race, even at a corporate level, it could significantly impact the value of "digital gold."
Is the next Bitcoin bull market led by China?
Bill Miller IV, founder of Miller Value Partners and an early bitcoin investor, suggests that China’s economic growth measures could act as a bullish catalyst for bitcoin to reach new heights.
Miller, who began investing in bitcoin in 2012 when it was priced at $200 and has since allocated half of his wealth to it, made this statement while commenting on an analysis of recent PBOC decisions by Michael Pettis, a senior fellow at Carnegie Endowment.
According to Pettis, China's economy faces significant domestic debt issues stemming from directive lending to specific industries and organizations by regional banks under PBOC’s guidance. To address this, the PBOC plans to move away from "quantitative targets" (party-directed banking sector oversight) and reduce subsidies unrelated to credit risks.
While Pettis remains skeptical of these reforms, Miller views them as a positive step. He believes that China’s fiscal stimulus could lay the groundwork for the next bitcoin rally.
Loading...
“China appears ready to take the next step in boosting #Bitcoin,” Miller posted on X (formerly Twitter), referencing Pettis’ analysis.
Miller also pointed to the potential launch of a U.S. strategic bitcoin reserve as another trigger for a significant bitcoin bull run in 2025.
Tectonic shifts in demand
Donald Trump’s post-election promises to establish a U.S. bitcoin reserve were partly aimed at countering similar efforts by China and other nations.
Currently, according to BitcoinTreasuries, the U.S. and China hold the largest bitcoin reserves among governments—207,189 BTC and 194,000 BTC, respectively. Combined, government holdings account for only 2.5% of the circulating BTC supply.
Countries that Own Bitcoin. Source: Bitcoin Treasuries
Decisions by major nations to establish bitcoin reserves could create tectonic shifts in demand for digital gold. Institutional players are expected to follow suit, as evidenced by recent bitcoin purchases by American corporations, with Chinese companies beginning to join the trend.
David Tepper's trading success is a zero-to-hero type of trading story, but it has lessons every novice trader will need. To date, his skills in trading and investing strategies have made many traders experts. So getting to know about Tepper is like having a solution to the fears and challenges of those looking to enter Forex trading or investing.
