How could the Chinese economic crisis impact Bitcoin and crypto?

CoinTelegraph reported:

On the latest episode of Cointelegraph’s Macro Markets, analyst Marcel Pechman explores how Turkey’s recent interest rate increase might attract hundreds of millions of new cryptocurrency investors, and how China’s looming economic crisis could affect Bitcoin (BTC) and crypto globally.

Turkey’s central bank has increased the interest rate by 6.5% to 15% in a dramatic attempt to fight inflation. The move comes as the local currency, the lira, dropped by 80% against the United States dollar in five years.

According to Pechman, whether the U.S. dollar holds its dominant position as a global reserve currency doesn’t matter. Turkey and Argentina’s 70% inflation in 2022 are perfect examples of how decentralized cryptocurrencies might be the sole lifeguard for hundreds of millions — if not billions — of people who cannot save and transact in foreign currencies.

The next part of the show discusses whether China’s economic weakness impacts Bitcoin and how its central bank digital currency could increase demand for cryptocurrencies. Goldman Sachs economists reduced their estimates for Chinese gross domestic product growth to 5.4%, citing “challenges from the property market, pervasive pessimism among consumers and private entrepreneurs, and only moderate policy easing.“

Pechman shows how the iShares MSCI China exchange-traded fund has been a better proxy for Bitcoin’s price and explains the importance of the Chinese economy to global growth. Ultimately, for Pechman, if the Chinese stock market goes down, the odds are cryptocurrency prices will be pressured as well. 

Lastly, Pechman presents a bullish case for cryptocurrency adoption during a recession — or lower growth, in China’s case — including stimulus checks being used to buy cryptocurrencies.

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