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<h2 id="quick-take">Quick Take</h2>
The People’s Bank of China’s (PBoC) continued liquidity injections into the market have been observed to coincide with significant movements in Bitcoin’s price.
For instance, analyst <a href="https://x.com/AlessioUrban/status/1716728786194935940?s=20" rel="noopener noreferrer nofollow">Alessio Urban</a>&nbsp;noted on Oct. 24 that as the PBoC’s liquidity injections surged, Bitcoin simultaneously broke above the $30,000 mark. A similar pattern was noted earlier this year, with a significant increase in PBoC’s liquidity that was followed by a rise in Bitcoin’s value. This expansion coincides with Bitcoin’s recent success, which isn’t solely attributed to liquidity injections but also to<a href="https://cryptoslate.com/insights/public-funds-invested-43-million-into-bitcoin-in-a-single-day-representing-10-of-the-years-total/" rel="noopener noreferrer nofollow"> ETF inflows,</a> as noted by Urban.
However, it’s crucial to understand that this isn’t a direct correlation but rather one of the many factors contributing to Bitcoin’s price movement, as Bitcoin is a global liquidity indicator.
<figure style="width: 100%" class="wp-caption alignnone"><img src="https://pbs.twimg.com/media/F9MLgqNWEAAPJJS?format=png&amp;name=large" alt="Capital Inflows via ETFs and PBoC liquidity injection: (Source: Bloomberg)" width="1920" height="820">
 <figcaption class="wp-caption-text">
 Capital Inflows via ETFs and PBoC liquidity injection: (Source: Bloomberg, @AlessioUrban)
 </figcaption>
</figure>
In a year, the PBoC has expanded its balance sheet by over 7%; the balance sheet equates to approximately 5.84 trillion in Chinese Yuan. This multifaceted dynamic illustrates the intricate relationship between traditional financial systems and the evolving digital currency environment.
<figure id="attachment_369650" aria-describedby="caption-attachment-369650" style="width: 100%" class="wp-caption aligncenter"><img class="wp-image-369650 size-full" src="https://cryptoslate.com/wp-content/uploads/2023/10/BTCUSD-CNY.png" alt="BTCUSD &amp; PBoC Balance Sheet: (Source: Trading View)" width="1410" height="893" srcset="https://cryptoslate.com/wp-content/uploads/2023/10/BTCUSD-CNY.png 1410w, https://cryptoslate.com/wp-content/uploads/2023/10/BTCUSD-CNY-300x190.png 300w, https://cryptoslate.com/wp-content/uploads/2023/10/BTCUSD-CNY-1024x649.png 1024w, https://cryptoslate.com/wp-content/uploads/2023/10/BTCUSD-CNY-768x486.png 768w" sizes="(max-width: 1410px) 100vw, 1410px">
 <figcaption id="caption-attachment-369650" class="wp-caption-text">
 BTCUSD &amp; PBoC Balance Sheet: (Source: Trading View)
 </figcaption>
</figure>
The post <a rel="noopener noreferrer nofollow" href="https://cryptoslate.com/insights/correlation-observed-between-pboc-liquidity-injections-and-price-of-bitcoin/">Correlation observed between PBoC liquidity injections and price of Bitcoin</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://cryptoslate.com">CryptoSlate</a>.

Correlation observed between PBoC liquidity injections and price of Bitcoin

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