According to the report from QCP Capital dated September 25, the macroeconomic environment continues to send positive signals for risk assets, including cryptocurrencies. The People’s Bank of China (PBoC) has announced a series of measures aimed at revitalizing the real estate market and the sluggish stock market. Following these steps, the China A50 index saw an increase of 8 percent. Additionally, the PBoC introduced a unique swap mechanism worth 500 billion yuan, allowing non-bank financial institutions to purchase Chinese stocks.
China’s Supportive Economic Measures
The recent moves by the PBoC indicate that more expansionary actions may follow. This, combined with the Federal Reserve’s participation in the global interest rate reduction cycle, suggests that all major central banks, except for the Bank of Japan (BoJ), will provide more liquidity to the markets. As a result, this may increase risk appetite in the markets and boost demand for cryptocurrencies.
In the last month, the difference between the yields on US two-year and ten-year Treasury bonds (2s10s spread) increased by 40 basis points to 21 basis points. This widening of the yield curve generally reflects positive expectations for economic growth, which can be supportive for risk assets in the medium to long term.
The US and Cryptocurrencies
On the other hand, QCP noted significant developments in the US political arena. Vice President Kamala Harris’s positive remarks about artificial intelligence and cryptocurrencies during fundraising events were highlighted. Following these discussions, prices of cryptocurrencies related to artificial intelligence saw an uptick.
Moreover, the US Securities and Exchange Commission (SEC) approved options trading for the IBIT Bitcoin 
$91,967 ETF. This development indicates a growing recognition and demand for cryptocurrencies as an asset class.
QCP emphasized that while there are no specific sectoral catalysts to trigger a rise in cryptocurrencies, the favorable macroeconomic conditions might lead to price increases. Given the volatile nature of cryptocurrencies and the multitude of potential upward catalysts, the next price surge could catch many off guard, potentially leading to missed opportunities.
