Bolstered by China’s announcement of more monetary stimulus to support its economy, and by continued interest from the BlackRocks of the world, bitcoin and other cryptocurrencies have also received a boost. The bitcoin price has even climbed above $65,000 – its September peak – and Michael Saylor of the software company MicroStrategy is once again talking up a $100 trillion vision for the firm. JPMorgan analysts have issued a $146,000 price prediction for bitcoin, as money has moved out of Chinese stocks.
Detailed in his speech to banks and state-owned companies, the finance minister Lan Foan announced that ‘[China will] go all out to stabilise the economy’ – but failed to specify how big the stimulus package would be. Investors and pundits, such as Mohit Kumar at Jefferies, believe we’ll see even greater fiscal stimulus in the coming weeks, even though few details have been made immediately available. Financial commentators, such as those writing for the Financial Times’s AlphaVille column, are influenced by analysts David Brickell and Chris Mill at Berkeley Research Group, who are keeping a close eye on the regime of low rates that will accompany this ‘tsunami of liquidity’ and the US Federal Reserve’s rate cuts. However, there is a brew of skepticism about the force of this emerging market rally, self-proclaimed advocates of the Austrian School of Economics, such as Russ Mould at AJ Bell, argue that China’s handling of this latest stimulus will make this rally short-lived because the grand plan is not detailed enough.
Source: Forbes
