Crypto assets soar warning traders collectively welcome Wall Street's "big move"

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Bitcoin and cryptocurrencies have seen significant increases in prices this year, including major cryptocurrencies Ethereum and Ripple (XRP). Ethereum founder Vitalik Buterin has an unexpected plan for cryptocurrency-based artificial intelligence that could open up a new avenue this week.

The price of Bitcoin has more than doubled in the past 12 months as the market braces for Wall Street’s “big move”, which some expect to give strong momentum to the Bitcoin, Ethereum, XRP, and crypto markets.

Arthur Hayes, co-founder of crypto derivatives pioneer BitMex, predicts that China’s monetary policy could lead to more RMB funds flowing into cryptocurrencies such as Bitcoin.

Arthur Hayes wrote in a blog post: "If China prints the renminbi on a large scale, these funds will enter the global market and support the prices of various risky assets. For the crypto market in particular, he described the impact as pouring gasoline into the crypto market, drowning the global market in yuan credit.

Arthur Hayes, who is now chief investment officer at investment fund Maelstrom, noted rising expectations that the Federal Reserve will soon begin to ease monetary policy tightening, leading to a recovery in the US economy as well as a weaker dollar, allowing China to “implement massive stimulus measures” that would revive the housing market and increase infrastructure spending.

Recent data suggesting that China’s short-lived rebound has stalled, adding to the pressure on China to take stimulus measures to boost growth.

Arthur Hayes wrote: “Since the U.S. dollar is the world’s largest financing currency, once the price of credit falls, all fixed supply of assets, such as Bitcoin and gold, will rise in U.S. dollar denominations.” ”

He emphasized the fungibility of global credit, noting that even if Chinese companies and wealthy individuals do not buy Bitcoin, the fungibility of global credit will lead to marginal USD inflows into hard currency assets such as Bitcoin.

At the same time, the circulating supply of stablecoins has increased for the first time in more than a year, which could have a similar impact on Bitcoin, Ethereum, Ripple, and other cryptocurrencies as central bank money printing.

Since May 2022, the number of stablecoins has continued to decline, falling by more than 30%. November will be the first growth in 18 months for stablecoins, with a 3.4% increase.

Grzegorz Drozdz, market analyst at Conotoxia, said: "In the financial system, increasing the total amount of virtual currencies can have an effect similar to that of central banks printing money. This can lead to an increase in funds in the market, which can have an impact on Bitcoin and other cryptocurrencies. ”

The stablecoin market capitalization has fallen from about $200 billion in May 2022 to just over $120 billion earlier this month, according to DeFiLlama data, which shows that the stablecoin market capitalization has been growing as of November.

Grzegorz Drozdz added: "The previous lack of new cash disbursements could lead to a shortage of funds available for new investments. This, in turn, could lead to significant market weakness, as evidenced by the reduced trading volume on crypto exchanges. The current rally could mark the first influx of new money into the market in 1.5 years. ”

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Source: Golden Finance