Bitcoin and Ethereum made gains Wednesday, following China’s stimulus measures announcement to stabilize its economy. The US tariff policies and China’s stimulus push may take crypto to new heights.
Regaining its lost momentum from February, Bitcoin and Ethereum made significant gains on Wednesday, climbing along the expanded financial market and China’s broadened approach to stabilizing its fluctuating economy.
Bitcoin, whose price declined last week, has climbed 5%, now trading at a price of 92,000 while Ethereum, with a similar steep in the past week, has seen a rise of 4.7%, trading at $2,285.
Beijing’s Policy Support Ignites Investor Sentiment
Crypto coins including Bitcoin and Ethereum have seen a major abrupt in the past week, mainly due to the increased scams and rug bulls revolving around the crypto industry, reducing investor’s confidence. Though Trump’s strategic crypto reserve announcement has brought some gains to Bitcoin, the coin renounced a major part of its gains from the post-election recently while Ethereum didn’t make a gain at all.
However, China’s announcement of adding stimulus measures at the National People’s Congress has brought back the lost investors’ confidence, increasing their trade in digital assets including Bitcoin and Ethereum. China’s act to bring new policy was a reflex to the US-China trade tensions on tariffs.
According to Chinese media reports, the increased external pressure has the potential to widely affect China in areas such as trade, science, and technology, and as an initiative to retaliate, the country is ramping up fiscal stimulus, prioritizing higher government deficit targets and increased infrastructure spending.
US-China Trade War Deepens
The United States, under Donald Trump’s Government, has imposed 20% tariffs on Chinese goods, affecting the world’s second-largest economy widely. Retaliating to the US tax imposed, China revealed its decision to impose tariffs on US products, ranging from 10% to 15%. The new tariff policy will come into effect from March 10.
The broadened market responded to the tariff talk favorably, providing an environment for crypto to rally. Both the S&P 500 and Dow Jones Industrial Average rose 1.1% while Nasdaq Composite showed a 1.5% increase. The lower treasury yield and lessened oil prices indicate improving financial conditions, which favors risk assets like crypto.
If the ongoing trade tension heats up further, it could pave the way for monetary easing, creating a scarcity of fiat currencies and leading to an increased demand for alternative assets, driving the crypto momentum further.
Cryptocurrencies Are Unpredictable
In the last week, the entire crypto industry faced a significant down, major cryptos like Bitcoin and Ethereum lost their trajectory of gains. Other altcoins like XRP and ADA also declined.
The major reason for the declined price was the increased scams around the crypto industry, meme coins like Libra and Melania whose price hiked soon after the launch and then steeply declined, creating a rug bull over investors. This reduced the investor’s confidence in crypto assets and made them think about the scope of investing in stocks like Nvidia.
However, things took a shift when Trump announced his plan for crypto reserves, including Bitcoin, Ethereum, and more, erasing all the existing bearishness from the market. And now with the tariff plans and China’s new policy support, crypto is again to make a rally, showing its level of volatility and ability to make a comeback in a blink of an eye.
