This Friday, Bitcoin hit a historic $66,280, a 25% rise in just three weeks. Strong inflows into Bitcoin ETFs and more general macroeconomic changes drove this optimistic trend. Still, there are concerns because China’s worsening housing crisis can endanger the continuous crypto surge.
Driven by a record-breaking $365.57 million into U.S.-based Bitcoin ETFs, the greatest daily sum in more than two months, and the latest rise, up 5% since Thursday, Trading at $65,000 for the first time since August, BTC never fails to enthrall investors all over.
Analysts attribute part of this comeback to Beijing’s recent announcement of stimulus plans aimed at bolstering its flagging economy. Among these are a roughly 50 basis point drop in mortgage rates and a minimum down payment requirement for second residences ranging from 25% to 15%.
Bitcoin’s Long-Term Outlook
These actions seek to assist China’s struggling housing market, which is vitally important for its economy. Though these steps might provide some temporary relief, Peter Berezin, Director of Research at BCA Research, cautioned that they are not a long-term solution for China’s ingrained economic problems.
Berezin said, pointing out that house starts in China had dropped by seventy percent from their high”This stimulus is a move to prevent collapse, not a push for growth.”
Berezin cautioned that while we support stalled housing projects, the completion of these current projects could lead to a decline in new construction, potentially exacerbating economic issues. This instability may find its way into world markets as risk-averse investors withdraw from erratic assets like Bitcoin.
Still, Bitcoin’s distributed character and restricted availability might draw attention especially in an environment of economic uncertainty. Higher-risk investments like cryptocurrency could appeal even more when China loosens its monetary policy by rate reductions.
With a market capitalization of $1.3 billion, Bitcoin was at a constant $66,272 as of press time. Analysts believe that if the purchasing momentum continues, Bitcoin could surpass its multi-month barrier mark of $68,350 and potentially surge above $80,000 in the near future.
Bearish momentum could, however, resurface should the price reversal at the resistance level, therefore promoting more market consolidation.
