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The bitcoin price limped into 2025, struggling along with global stock markets, despite wild speculation China could have beaten Donald Trump and the U.S. to creating a bitcoin reserve.
Now, as traders focus on a looming key date for incoming U.S. president Trump, a leak has revealed China’s central bank is scrambling to contain a fervid bond rally as it gears up to deliver a stimulus bazooka.
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The People’s Bank of China warned fund managers against chasing a bond rally, it was reported by Reuters, citing two anonymous sources, as expectations soar China will soon cut interest rates and unleash a round of stimulus to reinvigorate its economy.
China’s 10- and 30-year government bond yields, which move inversely to price, hit record lows this week after the Financial Times reported China’s central bank is likely to cut interest rates from the current level of 1.5% “at an appropriate time” in 2025.
Meanwhile, Yuan Da, deputy secretary-general of National Development and Reform Commission (NDRC), said during a press conference that China will sharply increase funding from ultra-long treasury bonds in 2025 to spur business investment and consumer-boosting initiatives, echoing China’s president Xi Jinping who said in his new year message the country will stimulate growth this year.
“The size of ultra-long special government bond funds will be sharply increased this year to intensify and expand the implementation of the two new initiatives,” Yuan said in comments reported by Reuters.
China’s efforts to boost its stalled economy have been seized on by bitcoin and crypto market watches as a potentially bullish catalyst heading into 2025.
“China is on the edge of collapse and their 10 year bond is a reflection of how broken their economy has become,” an anonymous economist posted to X, predicting China will be forced to ease its monetary policy in 2025.
“The country has to ease or it’s game over. Even though the liquidity will not help, it will boost other markets, like bitcoin, as capital continues to flee the country, and based on renewed and incredibly misguided optimism.”
Last year, Arthur Hayes, a cofounder of bitcoin and crypto derivatives pioneer BitMex who went on to set up the Maelstrom investment fund, predicted a China “bazooka” combined with the Federal Reserve easing will create a “glorious” bitcoin and crypto bull market in 2025.
Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curiousThe bitcoin price has surged over the last year, with some analysts predicting China could help send … [+] the bitcoin price