Yesterday, for the first time since August 26, the price of Bitcoin returned above 65k USD.
In fact, it reached almost 66,000 USD, but without hitting it.
The rise of the price of Bitcoin up to 65k USD
The rise in progress of the price of BTC actually started on September 19.
To tell the truth previously, from September 7 to 14, it had marked a strong rebound, after falling at the beginning of the month to below 53,000 USD.
However, that was just a simple rebound, as the final landing at around 60,000 USD did nothing but bring the price back to where the decline had started at the end of August.
What happened afterwards is indeed more interesting.
Starting from September 19, a new dynamic has been triggered, which had not been seen for some time in the Bitcoin market, and it has the potential to continue.
The Chinese stock markets
Such dynamic seems to be connected to the trend of the Chinese stock markets.
Taking as a reference the Hang Seng index of the Hong Kong stock exchange, it is discovered that starting from the session of December 17, it began to string together a long consecutive series of positive sessions, including today’s session.
Just think that the last week for the Chinese stock markets has turned out to be the best ever even since 2008 to today.
Compared to the closing on September 16, the Hang Seng index is now at +18%, and compared to the closing in August, it is still almost +15%.
The Japanese stock market in Tokyo is also doing well, with a +8% increase from the close on September 16, and an almost +3% increase from the close in August.
Comparing the trend of the Hang Seng index, during the opening hours of the Hong Kong stock exchange, with the trend of the price of Bitcoin, a clear similarity can be seen. This should be due to a common cause.
The Chinese central bank
Such a common cause could be attributed to an increase in liquidity in the Chinese financial markets.
In fact, for a few days now, the central bank of China (PBoC, People Bank of China) has initiated a new phase of expansionary monetary policy.
First, it cut interest rates, and secondly, the rumor spread that it is considering a massive injection of 142 billion dollars for the large state banks.
These two pieces of news, one confirmed but the other still not, were enough to make the Chinese stock markets euphoric in the last seven sessions.
It should be remembered that the PBoC in the two-year period 2020/2021 did not carry out a QE of the proportions of that of the Fed. The US central bank more than doubled its balance sheet in the span of a year and a half, while the PBoC limited itself to a +8% in the same period.
Subsequently, the Fed was forced to reduce its balance sheet a bit, while the PBoC continued to expand it by another +17% until December of last year.
However, during the first half of 2024, the PBoC had also reduced it a bit, but this decrease stopped in May.
The impact on Bitcoin
The new expansive monetary policy of the PBoC is effectively increasing the liquidity present in the Chinese and Asian markets.
The consequence is an increase in the prices of the assets traded on those markets, and since in reality Bitcoin is also being purchased by the Chinese, abroad, the price of BTC is also taking advantage of it.
It is necessary to remember that although in China it is formally forbidden to purchase Bitcoin on exchanges, many Chinese manage to buy it on foreign exchanges, and the Chinese State does not seem to be really opposing this.
The Hang Seng index has actually been on the rise since February, even though this rise seemed to have halted precisely in May. But after a decline, which ended in early August, it started a new rise that in recent days has brought it back to the annual highs, 5% higher than those of May.
Moreover, the current levels are well below not only the historical highs but also the highs of last year. In other words, it seems to have the potential to grow further.
For Bitcoin the situation is different, because the all-time highs date back to March of this year, and currently the price is at -11% compared to those levels. But BTC has recently started to rise again just as the Hong Kong stock market was also waking up, most likely thanks to the new expansive monetary policy of the PBoC.
The predictions on the price of Bitcoin after breaking 65k USD
Now the question that many are asking is: will this rise continue? And, if not, will the price of Bitcoin manage to stay above 65,000 USD?
On these forecasts, there is no agreement among the analysts.
On one side, there is the trend of the Chinese stock markets that could continue, helping the price of Bitcoin perhaps to even return to 70,000 USD.
On the other hand, there is also the medium/long-term trend of the price of Bitcoin, which generally in the years of the halving and American elections sees the bullrun start in the second half of October.
What has happened in recent days is not enough to indicate a clear trend reversal, nor to consider plausible such an early start of the bullrun.
However, if the Chinese stock markets continue to push, a return of the price of Bitcoin above 70,000 USD is not at all impossible.
We remember that the historical record, reached in March, was 73,800 USD, and since then it has never managed to return stably even above 72,000 USD.