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Slowing growth in new Chinese credit could act as a downside factor for Bitcoin and other risk assets, CoinDesk said in an analysis.
CoinDesk said China’s credit impulse, which tracks new credit flows relative to the size of the economy, is falling, while a recent Bloomberg index dropped to 20.84, the lowest level since 2008. Societe Generale investment strategist Albert Edwards warned slower Chinese credit creation may signal a broader global economic slowdown, which could pressure corporate earnings and U.S. stocks. That would suggest BTC may also struggle to avoid the impact if risk aversion spreads.
CoinDesk added that the influence of China’s credit conditions may be weaker than in the past, and gains could continue if U.S. institutional capital keeps driving the market. Still, if U.S. stocks lose momentum, BTC may also come under pressure.