The post Global Markets Hit Hard as China’s Rate Cuts Signal Panic appeared on BitcoinEthereumNews.com.

Global markets are experiencing significant turbulence as a result of China’s recent monetary policy actions and developments in U.S. Treasury yields. While Bitcoin has recovered quickly, altcoins are down across the board. The People’s Bank of China (PBoC) has implemented two surprise interest rate cuts within a week, signalling urgency to support its flagging economy. These actions have heightened market fears and led to widespread risk aversion. Cryptocurrency Market Impact Although often touted as a hedge against traditional financial market volatility, Bitcoin (BTC) once again showed significant correlation with risk assets during periods of heightened uncertainty and fell nearly 2% to around $64,000 – but has since recovered to around $68,000, and is up nearly 2% for the week. Ether (ETH), the second-largest cryptocurrency, has not proved as resilient, however, dropping more than 7% and pulling the broader altcoin market cap down with it.  The sharp decline in cryptocurrency prices underscores the sensitivity of digital assets to macroeconomic developments and risk sentiment.  Equity Markets Reaction In equity markets, major European indices such as Germany’s DAX, France’s CAC, and the eurozone’s Euro Stoxx 50 each declined over 1.5%.  Futures tied to the tech-heavy Nasdaq 100 in the U.S. were slightly lower, following the index’s 3% slide on Wednesday, according to data from Investing.com. The sell-off in equities reflects growing investor concerns about global economic stability and the potential for a slowdown in growth. Tech stocks, which had seen significant gains earlier in the year, are now facing increased pressure as market sentiment turns cautious. Details of China’s Rate Cuts Early Thursday, the PBoC announced a cut in its one-year medium-term lending facility rate to 2.3% from 2.5%, injecting 200 billion yuan ($27.5 billion) of liquidity into the market. This was the most significant reduction since 2020.  The move follows similar reductions…

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Filed under: News - @ July 27, 2024 6:20 am