Chinese Coins Give Double-Digit Gains as Central Bank Injects Liquidity Into Market
A liquidity injection from the People’s Bank of China is believed to have been the reason for a surge in prices of Chinese crypto projects on Monday.
Industry leaders, including the Tron founder Justin Sun, have claimed that Chinese money will ignite the new crypto bull market in the next few months. Today, China-based cryptocurrencies, like Neo, Conflux, and Flamingo, are up by more than 20%.
Due to the narrative of the Chinese money-led bull run, a Twitter user, “owen,” shared a watchlist for Chinese cryptocurrencies last week.
Hong Kong, the Experiment Ground for China?
Justin Sun believes Hong Kong is “one of the experiment zones for crypto development in China.” Over the past few months, the country changed its stance to pro-crypto. Paul Chan, the Financial Secretary of Hong Kong, committed to working towards making the country a crypto hub.
Today, the Hong Kong regulators also released a consultation paper on a framework to allow retailers to trade crypto from Jun. 1.
If mainland China softens its stance on crypto like Hong Kong, the community expects “big pumps.”
Chinese Central Bank Injects $92 Billion Into Market
According to a Bloomberg article, the People’s Bank of China (PBOC) injected 632 billion yuan (approximately $92 billion) into the market through reverse repurchase contracts. It is the largest single-day liquidity injection.
After the economy reopened from COVID-19 restrictions, the loan demands created a liquidity shortage. Hence, the PBOC had to inject the amount to ease the liquidity tensions in the economy. As the property sector is struggling and the exports have weakened, analysts expect more aggressive easing moves from the central bank.
The community speculates that Chinese quantitative easing will fuel the next bull run.