[NEWS] Cryptocurrency market rises across the board due to China's economic growth policy

The cryptocurrency market has risen significantly from the 14th to the 15th. Bitcoin (BTC) rose about 5% from the previous day, and Ethereum (ETH) also rose about 7%.

The rise is due to the outlook for the Chinese economy. On the 13th, Goldman Sachs Group revised upward its economic growth forecast for China for 2024 and 2025 in response to China's economic stimulus measures announced last weekend, including an expansion of fiscal spending.

In its report, Goldman raised its forecast for China's GDP growth rate this year from 4.7% to 4.9%, up 0.2%. It also revised its growth forecast for 2025 from 4.3% to 4.7%.

A Goldman economist explained, "The latest economic stimulus measures announced by the Chinese government clearly confirm that the authorities are shifting away from cyclical production management and strengthening their economic-focused policy."

At a press conference on the 12th, China's Ministry of Finance announced that it will allow local governments to use 2.3 trillion yuan (about 48 trillion yen) of funds raised through special bond issuance in the fourth quarter (October to December).

Goldman explained that this will lead to a "last-minute" public spending plan, and analyzed that it will bring about a stronger economic recovery than initially expected.

The National Development and Reform Commission, which draws up China's overall economic policy, announced last week that it will approve 200 billion yuan worth of investment plans for next year in October, ahead of schedule. China's President Xi Jinping has tended to downplay the economy, but this seems to have reversed course.

In addition, JP Morgan analyst Nicolaos Panigirtzoglou wrote in a report that "rising geopolitical tensions and the upcoming U.S. presidential election will likely strengthen what some investors call the underground downturn, favoring both gold and Bitcoin."

Gold and Bitcoin are likely to rise in price due to high government budget deficits in major economies, declining confidence in fiat currencies in some emerging markets, and broad diversification from the dollar, and Donald Trump's election victory is likely to strengthen the price decline trade.

A report from the bipartisan Federal Budget Committee predicted that Trump would increase federal obligations by about twice the rate of increase expected if Democratic candidate Kamala Harris were elected.

Will Bitcoin prices rise after the presidential election?

If Trump takes office, the federal debt is estimated to increase by $7.5 trillion by 2035, but if Harris is elected, it will increase by $3.5 trillion.

The US national debt has been increasing in recent years. It exceeded $34 trillion in early 2024 due to the economic stimulus measures in response to the coronavirus pandemic. JP Morgan analysts said Bitcoin prices have not yet seen the surge expected from lower interest rates since the Fed cut interest rates last month, and predicted that this will happen after the election.

The series of reports also appears to have contributed to a price rise in the cryptocurrency market.

Reference: Bloomberg
Image: Shutterstock

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