Bitcoin's price has shown a positive correlation with the People's Bank of China's balance sheet for eight years, currently holding a correlation coefficient of 0.66.
The PBOC's potential stimulus of up to 1 trillion yuan could boost investments in blockchain and cryptocurrencies, positively impacting Bitcoin prices as the market reacts.
Despite its strong correlation with the PBOC, Bitcoin's correlation with the Federal Reserve's balance sheet is at -0.88, the lowest since 2016, indicating differing influences.
This increase in the PBOC's balance sheet reflects ongoing monetary easing efforts which, along with a cut in reserve requirements, aim to stimulate economic growth.
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