China is considering a massive economic stimulus amid a significant slowdown, potentially benefiting altcoins. With global liquidity impacting cryptocurrencies, what opportunities and risks await investors in 2025 ? Discover the insights to navigate this pivotal moment.
Cryptocurrencies are facing a pivotal period as the People’s Bank of China (PBOC) considers stimulus measures to address the slowdown in economic activity. Analysts suggest this could trigger a significant surge in altcoins, potentially exceeding their previous all-time highs.
While headlines often focus on the US Federal Reserve, Chinese monetary policy exerts an equally crucial influence on global risk assets, including cryptocurrencies. A March 2025 report from 21Shares highlighted a 94% correlation between Bitcoin price and global liquidity, outperforming both the S&P 500 and gold. This close relationship underscores the importance of central bank decisions in shaping investor sentiment toward crypto markets.
According to Porkopolis Economics, the US monetary base M0 currently stands at $5.8 trillion, followed by €5.4 trillion in the eurozone, $5.2 trillion in China, and $4.4 trillion in Japan. Given that China represents nearly 19.5% of global GDP, the PBOC’s monetary policy decisions have significant implications for international capital flows, even when the Fed monopolizes market attention.
Despite growing fears of a US recession, markets have remained remarkably resilient. The University of Michigan consumer sentiment survey, released in early August, revealed that 60% of Americans expect worsening unemployment in the next 12 months, a level of pessimism not seen since the 2008-2009 financial crisis.
Yet investors continue to show a certain optimism. The S&P 500 closed above 6,400 points for the first time in its history, while US 5-year Treasury yields climbed from 3.74% on August 4 to 3.83% on Friday, signaling reduced risk aversion. This increase in bond yields often indicates investors’ greater willingness to embrace riskier assets.
This combination of factors—resilient equity markets, rising bond yields, and potential Chinese stimulus—creates a favorable environment for an altcoin rebound. If the PBOC implements expansionary measures, the influx of liquidity could trigger a widespread rotation into cryptocurrencies, driving prices higher across a broad range of tokens.
Before the 2017 crackdown, China was one of the largest global markets for crypto and altcoins, with significant interest at both grassroots and institutional levels. Altcoins with strong Chinese roots such as NEO and VeChain were particularly popular among local investors.
Although cryptocurrency ownership in China has fallen to around 5.2%, reflecting the decline in retail participation due to government restrictions, blockchain projects and Chinese altcoins continue to benefit from solid industrial and technical support. Many Chinese citizens reportedly engage in crypto markets via offshore platforms or intermediaries, despite regulations in place.
Despite favorable liquidity conditions, several uncertainties remain. Fears of a global recession, geopolitical tensions, and evolving regulatory frameworks could temper investor enthusiasm. Additionally, the effectiveness of Chinese stimulus measures will depend on market perception and execution. If these policies prove insufficient or temporary, the altcoin market may respond only modestly.
Analysts also emphasize the importance of US economic conditions. Rising bond yields indicate that investors are increasingly factoring in expectations for inflation and growth. These signals interact with Chinese liquidity policies, creating a complex context in which altcoins could either thrive or face headwinds. It will also be crucial to monitor developments in tariffs imposed by the Trump administration on China, which have been postponed for an additional 90 days.
In conclusion, the evolution of stimulus policies in China, combined with US economic conditions and other global market factors, could shape the trajectory of altcoins in the coming months. Stay alert to developments to seize emerging opportunities in this dynamic crypto environment.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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