China's Economic Turbulence, Bitcoin's Ascent, and Global Financial Shifts

China's economy has encountered significant challenges in recent months, becoming a focal point of discussions within the global financial community.

Several noteworthy developments in China that warrant attention:

1. **Real Estate Reckoning \ China's real estate market has tumbled, echoing levels last witnessed in 2009, indicating severe market turbulence. Compounding this, there are concerns that local banks could be exposed to this real estate turmoil, exemplified by a recent mini bank run at the Bank of Cangzhou driven by Evergrande Bankruptcy fears.

2. Stocks Plunge

   Stock market indices are also reflecting the uncertainty, with the CSI 300 Index plunging to its lowest point since February 2019. Additionally, an unprecedented $22.1 billion flowed out of the Stock Connect between August 7 and October 19, a trading link that offers international investors access to mainland China shares via Hong Kong.

3. Government Stimulus Has Yet to Yield Significant Results

   Despite reactive measures taken by Chinese authorities, the country's economic recovery is still in the balance.
   
   Here are some of the actions that have been implemented:

   
   

   1. The fiscal debt ratio has been raised from 3% to 3.8%, reflecting a financial commitment to stimulate the economy.

   2. Just this week, China's top parliamentary body approved a substantial 1 trillion yuan (equivalent to $137 billion) issuance.

   3. The People's Bank of China (PBoC) injected 789 billion yuan (approximately $108 billion) into China's banking system through its medium-term lending facility.

   4. Major Chinese banks have been reducing mortgage rates in line with a policy directive designed to stimulate the housing market.

      
      

On a more optimistic note, China's Q3 GDP surpassed expectations, coming in at 4.9% compared to the market forecast of 4.6%. With the easing policies in effect, analysts are now anticipating growth exceeding 5% in the fourth quarter, which could set China on track to meet its 2023 growth target.

Bitcoin on Path to Outshine the Nasdaq

Since the Cointelegraph published the fake news about the ETF approval, everyone seems to have realized that an ETF approval is a question of “when” and not “if.”

As a result, everyone is front-running the expectations of an ETF to come, which has pushed prices up significantly and, even more importantly, has made a noticeable shift in overall market sentiment.

This happens at a time when the Nasdaq has suffered some volatility following mixed earnings results from Mega Caps.

Usually, Bitcoin will trade in sync with technology assets, but with the latest surge, it seems very probable that a secular bull market has started for Bitcoin.

During Bitcoin’s bull markets, usually, the performance of the Nasdaq will be absolutely dwarfed.

Noteworthy Mentions

• The American Debt levels are getting out of hand

  As I have stated in some of my recent letters, the increasing debt levels in the American economy are worrisome, to say the least. The national debt of the US is $33 trillion and has surged by over $600 billion in just the past month. I wrote a rundown on the numbers in a tweet.

Industry Shakers

• Argentina’s Pro-Bitcoin Javier Milei Heads to Run-Off Election

  In the upcoming Argentine presidential run-off election next month, voters will choose between the current Finance Minister, Sergio Massa, and self-described anarcho-capitalist Javier Milei. In the first round of voting on Sunday, Milei secured 30% of the vote, finishing second, with Massa leading at 37%. Notably, Milei has shown support for Bitcoin, viewing it as a means to return control of money to its original creator, the private sector. He has also advocated for the abolishment of Argentina's central bank, labeling it a "scam."

• SEC Dismisses Charges Against Ripple Executives

  The United States Securities and Exchange Commission (SEC) chose to withdraw charges on Thursday against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen. They had been jointly charged with the company on allegations of violating securities laws through sales of the XRP token. Ripple characterized the SEC's move as a "stunning capitulation" in an official statement, and Ripple's Chief Legal Officer, Stuart Alderoty, referred to it as "a surrender by the SEC" in a tweet.

• Microsoft Stock Jumps After Earnings Beat

  Microsoft's stock saw an increase in value following the release of its September quarter financial results, which exceeded expectations. The strong performance of the company's cloud computing sector contributed to this success. Microsoft reported revenue of $56.5 billion, reflecting a 13% growth compared to the previous year and surpassing Wall Street's estimates by $2 billion. Microsoft shares experienced a 3.3% rise in trading on the day following the report, which was Wednesday.

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