China’s Potential Trillion-Dollar Stimulus Sparks Speculation of Crypto Price Surge Amid Federal Reserve’s Warning

According to a former Forbes billionaire, Chamath Palihapitiya, China’s economic stimulus package could potentially cause a surge in the prices of cryptocurrencies, including Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Tron, Solana, and Polygon. Palihapitiya stated that if China implements quantitative easing and injects trillions of dollars into the economy, it will have an inflationary effect on various assets because of China’s importance in the global economy. China recently announced that it is considering an economic package to boost its post-pandemic recovery, aiming to stimulate effective demand.

The Federal Reserve’s announcement of future interest rate hikes has led to speculation about China’s potential stimulus package and its impact on cryptocurrencies. The price of Bitcoin, in particular, has experienced significant fluctuations, with a 50% increase this year followed by a sudden slowdown, prompting a warning from Coinbase. Palihapitiya believes that China’s massive money printing could prevent a hard landing for the global economy.

In recent years, the prices of Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Tron, Solana, and Polygon have been influenced by stimulus measures implemented by central banks, including the US Federal Reserve. In 2022, the crypto market experienced a crash when the Fed began tightening its monetary policy to address rising inflation, resulting in a $2 trillion loss in market value. While the Fed has temporarily paused interest rate hikes, its chair, Jerome Powell, indicated that further hikes are likely in the future.