China cuts interest rates and injects a large amount of liquidity, global stock markets rise together, and Bitcoin surpasses 64K

Yesterday on 9/24, driven by the latest economic stimulus measures from the People's Bank of China, global stock markets saw gains almost across the board, with the S&P 500 and the Dow Jones Industrial Average hitting new highs. Cryptocurrencies such as Bitcoin and Ethereum also experienced simultaneous increases.

China Introduces Stimulus Plan, Global Stock Markets Rally

According to a report by CNBC, the World's Largest Business Federation reported on Tuesday that consumer confidence in the economy took a steep dive in September, marking the largest drop in over three years due to increased concerns about employment and business conditions. The committee's Consumer Confidence Index fell from 105.6 in August to 98.7, the largest monthly decline since August 2021, during the outbreak of the COVID-19 pandemic.

Despite the impact of declining consumer confidence on the market, attention has shifted to China's new round of economic stimulus measures. The People's Bank of China announced its most aggressive stimulus plan since the pandemic in an attempt to prevent the world's second-largest economy from slipping into deflation and to drive growth in line with government expectations. On 9/24, global stock markets closed mostly higher, with the S&P 500 and Dow Jones Industrial Average hitting new highs. Cryptocurrencies such as Bitcoin and Ethereum also saw gains.

Aggressive Printing to Rescue the Economy! China Rolls Out Largest Economic Stimulus Plan Since the Pandemic, Providing Short-Term Relief

Global Easing Supports Risk Assets Including Cryptocurrencies

Analysts at QCP Capital stated that China's aggressive monetary measures, coupled with a recent 50 basis point rate cut by the Federal Reserve, may support risk assets including cryptocurrencies in the near future.

QCP Capital highlighted the growing positive sentiment in the derivatives market for Ethereum (ETH). Specifically, they observed changes in Ethereum options, where the front-end skew has shifted from put options to call options, indicating investors' expectations of price appreciation.

Ethereum's implied volatility is 9% higher than Bitcoin's, showing a bullish market sentiment and higher expected volatility.

Following the rate cut by the Federal Reserve, Ethereum outperformed Bitcoin.