News View Non-AMP

Cryptocurrency Investment Shifts to China’s Stocks – Bitcoin Left Behind?

Published by
Vignesh S G

China’s stock market has surged following the government’s recent economic stimulus aimed at reviving its struggling economy. Both the Shanghai Composite Index and the Hang Seng China Enterprises Index saw significant gains. However, instead of boosting the cryptocurrency market as some predicted, the stimulus appears to have shifted investment away from it—especially from Bitcoin.

The question now is: Is this capital shift temporary?

Chinese Stock Markets Soar After Stimulus

The major stock indexes in China, the Shanghai Composite Index and the Hang Seng China Enterprises Index, have surged since the government introduced its economic stimulus package.

On September 24, People’s Bank of China Governor Pan Gongsheng announced the plan to save the economy from a potential collapse. This announcement came after reports highlighted the severe challenges facing China’s economy, restoring hope that the country could still hit its 5% growth target this year.

On September 24, the Shanghai Composite Index stood at 2,770.43. It has since risen to 3,336.49, an increase of 20.43%. The market had been largely stagnant until September 13, but strong buying began on September 18, driving positive momentum ever since.

The Hang Seng China Enterprises Index followed a similar pattern, though buyers entered this market earlier, around September 10. At that point, the index was at 6,036.14. By the time the stimulus was announced, it had already hit a monthly high of 6,723. Since then, the index has jumped by 23.9%, reaching 8,330.85.

Investors Flock to Chinese Stocks

Recent reports indicate that investors are moving funds from stablecoins like USDT into Chinese stocks, eager to take advantage of the market rally. This shift has reduced investment flowing into the crypto market, particularly into Bitcoin.

On September 24, Bitcoin (BTC) was trading at about $64,253. While it briefly rose to $65,903 on September 28, it then fell sharply, hitting a low of $60,658 by October 2. The market has struggled to recover, with BTC currently priced at $63,432.63—significantly lower than it was when China’s stimulus was announced.

Is China Hurting Bitcoin’s Growth?

Some analysts believe that the focus on Chinese stocks is limiting Bitcoin’s growth. Danny Chong, co-founder of Digital Asset Association Singapore, thinks this capital shift is temporary. He expects that once the Chinese stock market stabilizes, the crypto market will regain its momentum.

However, others are skeptical about the long-term impact of China’s stimulus. Analysts from TS Lombard and BCA Research have questioned whether the stimulus can fix the deeper problems in China’s economy. They’re also unsure whether the stock market’s current rally can be sustained.

Bitcoin’s Dip Likely Short-Term

While China’s stock market surge may have temporarily pulled investment away from Bitcoin, many analysts believe this shift won’t last. As China’s markets stabilize, it’s expected that capital will flow back into the crypto market, reigniting bullish trends for Bitcoin and other digital assets.

Vignesh S G

Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

Recent Posts

XRP Price Prediction And Analysis For April 27

XRP continues to show strength despite recent market volatility. While Bitcoin experienced sharp moves, XRP’s…

April 27, 2025

Next 23x Token? This DeFi Crypto Could Outperform SOL and AVAX in 2025

In a market where momentum often shifts fast and unpredictably, smart investors are increasingly focused…

April 27, 2025

Where to Earn Passive Crypto Income: Is FXGuys the Best Altcoin Presale Right Now?

Everyday trading isn’t everyone’s cup of tea. Not everyone wants to stare at screens all…

April 27, 2025

Best Crypto to Buy Now With $1 Target? MUTM Has Utility, Revenue, and Room to 40x

As the crypto market regains its footing, investors are already scanning for the next crypto…

April 27, 2025

Missed SHIB and PEPE? This Underdog Crypto Could Outperform Both by Summer 2025

While many have seen tokens like SHIB and PEPE make headlines, a new contender is…

April 27, 2025

Ripple CEO Hints XRP Could Match Bitcoin’s Price

The crypto market is starting the week with a slight pullback. XRP is currently trading…

April 27, 2025