FX168 Financial News Agency (Asia Pacific) - The well-known analysis institution QCP Capital announced to subscribers that China's cessation of economic stimulus measures will lead to capital reallocation for bitcoin, benefiting the crypto market with new liquidity enhancements. However, the institution warns that risk assets still face short-term downside risks.
Despite the decline in US macroeconomic data this week, causing the stock market to face short-term downside risks, QCP believes that the situation for bitcoin and the broader crypto market will improve soon.
(Source: CoinTelegraph)
"With the weakening momentum of the Chinese stock market, we expect capital to reallocate to the crypto domain, reflecting the increasing maturity of this industry as an alternative risk asset," the institution said.
This outlook is consistent with the more optimistic view of crypto market observers for the remaining time in October and the fourth quarter.
Some still believe that bitcoin will achieve steady growth in the classic 'Uptober' pattern, and global liquidity trends will significantly boost risk assets before the end of the year.
"We expect the stock market to face downside risks in the near term, as upcoming earnings season and US Consumer Price Index (CPI) data may challenge the stock market's high valuation. Geopolitical tensions further complicate the stock market outlook," stated QCP.
However, we maintain a medium-term optimistic stance and expect the headlines of the November US election to continue to drive the cryptos movement.
Considering the overall trend of Bitcoin prices, traders generally believe that caution needs to be maintained in the short time frame.
The setback of the Chinese economy boosted the US dollar index, which is usually a resistance to the performance of cryptos, and put pressure on the US stock market.
Prominent trader Bluntz tweeted: "I believe that the sudden rise of cryptos early this week could be a trap, with Bitcoin showing strong performance over the weekend."
(Source: Twitter)
At the beginning of this month, the trading price of the US dollar index is at the lowest level since July 2023, and has risen 1.6% so far this month.
In addition to China's cessation of economic stimulus measures, which may trigger capital reallocation to Bitcoin, the Hong Kong market also received a major news, with 11 companies expected to be licensed virtual asset platforms by the end of the year.
In a recent interview, Ashley Alder, CEO of the Hong Kong Securities and Futures Commission, stated that while maintaining market fairness, the development of a regulatory framework for virtual asset trading platforms is being advanced to support the tokenization of traditional products using blockchain and Web3 technologies, promoting the establishment of a responsible and secure fintech ecosystem. The complete framework is expected to be in place by at least next year.
To lead the transformation of the financial market, Ashley Alder emphasized the need to embrace financial innovation and advance the development of a regulatory framework for virtual asset trading platforms. The Securities and Futures Commission has issued the 3rd license, with 11 platforms identified as applicants awaiting licensing. Initial on-site inspections have been conducted, with requests for these applicants to make necessary adjustments. There are expected developments by the end of the year, including phased issuance of licenses. Applicants not meeting the requirements will lose eligibility, while those meeting the criteria will be conditionally licensed.
CryptosOTCRegarding OTC services, Ashley Alder pointed out that the Hong Kong Securities and Futures Commission has sought industry feedback on establishing a new licensing regime for cryptocurrency OTC trading services and cryptocurrency custody services, and will further advance the development of a regulatory framework for virtual asset trading platforms.
