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The start of 2025 has seen China’s market and currency woes ensue, as analysts claim these struggles could lead to a “second-term” Bitcoin (BTC) bull run. The largest crypto by market capitalization has gone back to trading over $100,000 after going through price corrections in December. According to data from Trading Economics, the Chinese yuan (CNY) recently fell to its lowest level since September 2023, at 3.22 per U.S. dollar. This marks a continued decline, with the yuan dropping 0.4% this month and extending its three-month losing streak.  The People’s Bank of China (PBOC) has increased its efforts to stabilize the currency, but economic tensions ahead of Trump’s January 20 inauguration present challenges. As noted by Reuters, the PBOC warned fund managers against chasing a bond rally as it prepares to launch a new stimulus effort to revive the economy. Yuan depreciation sparks bond, stock market pressure Analysts believe the yuan’s struggles are compounded by falling yields on Chinese government bonds. The yield on the 10-year Chinese government bond recently dropped to 1.6%, down 100 basis points from a year ago. This is in stark contrast to rising yields in the US.  Strategists from BNP Paribas predict the yuan could reach 7.45 to the dollar by the end of 2025, while Nomura forecasts a drop to 7.6 by May. The predictions were also supported by JPMorgan Chase, which expects the currency to weaken further, with the offshore yuan potentially dropping to 7.5 in Q2. Chinese stock market investors are also feeling the heat of the jurisdiction’s economic turmoil. On Monday, the CSI 300, which tracks blue-chip stocks, fell to its lowest level since September.  According to TradingView, the ChiNEXT Index, a gauge for innovative and high-growth small and medium-sized enterprises (SMEs), has dropped 8% since the start of December. “Once…

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Filed under: News - @ January 7, 2025 3:20 pm