#DecemberMarketOutlook

ℹ️The People's Bank of China(The People's Bank of China (PBOC) confirmed the following policies at its Party Committee meeting:
1. Moderately easing monetary policy: Preparing to maintain liquidity by lowering reserve requirement ratios and interest rates, stimulating growth and managing inflation.
2. Internationalization of the Renminbi: Actively promoting the development of cross-border Renminbi payment systems, and steadily advancing the development of digital Renminbi)e-CNY( within the framework of increasing financial sector openness.
ℹ️Analysis of the impact on the crypto market:
1. Direct impact: Creating a macroeconomic backdrop
· Increased global liquidity: The PBOC's easing policy injects liquidity into one of the world's largest economies. Some funds, as historically, may seek higher returns in the global markets (including crypto assets as a risk asset class) through)various channels(. This has an indirect positive effect on market capitalization growth.
· Inflation expectations: The clear goal is to “reasonably boost prices,” indicating a tolerance for moderate inflation. Over the long term, this reinforces the narrative of crypto assets)especially Bitcoin( as tools to combat inflation and fiat devaluation, although the direct correlation between the two is complex.
2. Focus: Digital Renminbi)e-CNY( and internationalization
· Competition or adaptation? The steadily developing e-CNY does not directly support decentralized cryptocurrencies but rather strengthens the nation’s sovereign digital asset)CBDC(. This includes:
· Competition with stablecoins and payment-based cryptos in digital payments.
· Technology adaptation drive: Promoting e-CNY widely will accelerate public and enterprise awareness of digital wallets and blockchain technologies, potentially lowering the threshold for accepting other digital assets in the future.
· Control tools: CBDC grants the state unprecedented control over money flow, contrasting with the philosophy of decentralized cryptocurrencies.
· Renminbi internationalization: Building multi-channel cross-border payment systems challenges the monopoly of systems like USD and SWIFT. If successful, this could reshape the global monetary architecture and open new digital asset channels, especially for national digital currencies.
3. Regulatory environment: “Safeguarding national financial security”
· All measures are promoted within a framework of control and security. The PBOC will strictly distinguish between developing its own digital Renminbi and “speculative” decentralized cryptocurrencies.
· This means that strict restrictions on domestic crypto trading and mining)except for NFTs and blockchain services in permitted areas(may continue. China will promote its digital currency while restricting competitors.
ℹ️Summary and conclusion:
1. Positive macro effects: Major central banks (including the Federal Reserve, ECB, and now the PBOC) maintaining long-term easing and inflation-targeted policies create a favorable environment for limited-issue hard assets like Bitcoin.
2. Development of e-CNY—A double-edged sword for the crypto market:
· Short-term: Enhancing national digital competitiveness and maintaining strict Chinese regulation.
· Long-term: Legitimizing digital assets as a category, promoting technological adoption, and possibly building new infrastructure bridges between traditional finance)and the decentralized world.
3. Major signal: The world is heading toward digital currencies. China bets on a centralized control model, while the crypto market offers decentralized alternatives. The PBOC’s policies confirm this trend but also intensify competition between these paradigms.
What does this mean for investors?
Don’t expect an open Chinese market. Focus on e-CNY as an indicator of digitalization speed and a potential “gateway” in the future. More importantly, monitor global liquidity; according to the PBOC’s statements, liquidity will remain high. This forms the basis for a long-term market bull run.