Chinese Money is flowing into Bitcoin and cryptocurrencies from the profits made by its roaring stock market. Largest Chinese exchanges registered double volume while Chinese Yuan is seeing the highest money flow in cryptos after US dollar in fiat currency.
Chinese Stock Market Outperforming Global Major Equity Indexes
From last year’s world’s worst-performing stock market, China’s stock market has become the best this year.
After US President Donald Trump postponed the trade deal with the China and as Wall Street bets on more stimulus, Shenzhen, and Shanghai indexes are in a beast mode. Investors are long China as the stock market gets carried away with Wall Street doubling down on Trump to just throw in the towel on the tariffs.
Currently, there are divergent views on the direction the Chinese stock market will take next. While Morgan Stanley continues to be optimistic on the country’s A-shares and further recommending global investors to increase their holdings, Citic Securities and UBS Securities are moving cautiously.
“The market sentiment is clearly getting more excited,”
said Laura Wang, the China equity strategist at Morgan Stanley.
However, it is still cheaper relative to the MSCI Emerging Markets Index that covers the large and mid-cap stocks across 24 emerging markets.
“In fact, the Chinese market is the only market where we see signs of clear improvement in the pace of profit warnings, while companies in other global markets, including Europe, the U.S., and Japan, are still facing accelerating downward pressure,”
But Gao Ting, the head of China Strategy at UBS Securities said that corporate earnings report and economic data can bring the market sentiment down.
Later today, the US Federal Reserve is due to announce its interest rate decision. Moreover, next week Treasury Secretary Steven Mnuchin and US Trade representative Robert Lighthizer are planning to travel to China for a new round of talks with Chinese Vice Premier Liu He, as stated by a White House Official said on Tuesday, so it’s to be seen where Chinese stock market will go.
China Actively Investing in BTC & Cryptos
According to the latest data, it looks like the gains made by Chinese stock markets have flown into Bitcoin and cryptocurrency market as the major Chinese crypto exchange saw a surge in their volume recently.
Largest Chinese exchange has more than doubled volume in past week.
— Anton Pagi (@AntonPagi) March 17, 2019
Moreover, according to the data provided by Coinlib, Chinese Yuan accounted for the second highest share in the cryptocurrencies like Bitcoin, Ethereum, and Stellar. Through Bitcoin, the money also flowed into Litecoin, EOS, Bitcoin Cash, Dash, Neo, and Ethereum Classic among other cryptos and into Zcash through Ethereum.
China is still actively investing in cryptocurrencies and if it's stock market climbs further, we might get to see more greens in bitcoin and crypto as well.