On Friday, China’s central bank took steps to support the yuan, which has been losing ground, with its depreciation being viewed as a potential tailwind for bitcoin (BTC).
The People’s Bank of China announced that it will stop purchasing government bonds this month as their demand now overshadows the supply.
Experts said the move reflects policymakers’ discomfort with the sliding bond yields, which move in the opposite direction of prices, and the resulting depreciation in yuan.
The yield on the benchmark 10-year Chinese government bond dipped below 1.6% early this week, marking a staggering 100 bps decline on a 12-month basis, according to data source TradingView.
Meanwhile, its U.S. counterpart rose to 4.7%, the highest since November 2023, widening the U.S.-China yield differential in favor of the USD.
As such, the CNY slipped to 7.32 per USD, extending its three-month losing streak led in part by concerns of tariffs under President-elect Donald Trump’s tenure set to begin on Jan. 20.
Early this week, analysts said the declining yuan could result in a capital flight, some of which could find its way into the crypto market and add to BTC’s bull momentum.
Read MoreCoinDesk: Bitcoin, Ethereum, Crypto News and Price Data[#item_full_content]
The launch of Bitcoin ETFs in January 2024 was heralded as a groundbreaking moment for…
By Omkar Godbole (All times ET unless indicated otherwise) The crypto market has regained some…
Many traders were watching the bitcoin (BTC) price action during European hours on Friday, slightly…
Bitcoin (BTC) has not broken below $90,000 since Nov. 18, and continues to swing between…
Economic data and general profit-taking may have dented an early bitcoin (BTC) rally, but data…
U.S.-listed bitcoin (BTC) miners accounted for 25.3% of the global network in December, Jefferies said…