On Friday, China’s central bank took steps to support the yuan, which has been losing ground, with its depreciation being viewed as a potential tailwind for bitcoin (BTC).
The People’s Bank of China announced that it will stop purchasing government bonds this month as their demand now overshadows the supply.
Experts said the move reflects policymakers’ discomfort with the sliding bond yields, which move in the opposite direction of prices, and the resulting depreciation in yuan.
The yield on the benchmark 10-year Chinese government bond dipped below 1.6% early this week, marking a staggering 100 bps decline on a 12-month basis, according to data source TradingView.
Meanwhile, its U.S. counterpart rose to 4.7%, the highest since November 2023, widening the U.S.-China yield differential in favor of the USD.
As such, the CNY slipped to 7.32 per USD, extending its three-month losing streak led in part by concerns of tariffs under President-elect Donald Trump’s tenure set to begin on Jan. 20.
Early this week, analysts said the declining yuan could result in a capital flight, some of which could find its way into the crypto market and add to BTC’s bull momentum.
Read MoreCoinDesk: Bitcoin, Ethereum, Crypto News and Price Data[#item_full_content]
Led by Executive Chairman Michael Saylor, Strategy acquired 1,031 bitcoin, bringing holdings to 762,099 coins.Read…
Proposed bitcoin-for-bitcoin acquisition of Moonshot and Never Say Die would triple the company's holdings and…
Trump said that the two countries held "very good and productive conversations regarding a complete…
A key momentum indicator that has been accurate at calling price selloffs since October just…
Bitcoin shows early signs of outperformance against gold, with the BTC gold ratio rebounding toward…
BTC slipped back into February's range after Donald Trump threatened to attack Iran's power plants,…