Bitcoin, Asian Equities May Be Losing Capital to China Stocks
Even with a 3-5% cost to convert [stablecoin] USDT into equities, the potential upside of 50-70% in China's stocks makes this a strategic move, one observer said.

- Since late September, BTC has held largely flat amid the stimulus-led 20% surge in the Chinese stocks.
- The rebound in the battered Chinese equities could be sucking out capital from crypto and Asian equity markets.
- The capital rotation may be short-lived.
China's battered stock market has experienced a resurgence since late September powered by the barrage of stimulus by Beijing.
But this surge could be sucking capital out of the crypto market, capping the upside in bitcoin, the leading cryptocurrency by market value, and other Asian markets, according to observers.
"The current surge in Chinese stocks, driven by the stimulus package and investor activity during the national holiday week, represents a calculated risk-reward trade for savvy investors. Even with a 3-5% cost to convert [stablecoin] USDT into equities, the potential upside of 50-70% makes this a strategic move," Danny Chong, co-founder of multi-staking protocol Tranchess and co-founder of Digital Assets Association Singapore, told CoinDesk in an email.
Since Sept. 24, the Shanghai Composite Index has jumped over 20%, reaching its highest since May 2023. The Hang Seng China Enterprises Index, which constitutes Chinese stocks listed in Hong Kong, has jumped over 25%, according to data source TradingView.
The rally follows stimulus announcements that included interest rate cuts, liquidity support for stocks, banking system capital injections, and a promise to support property prices. The enormous stimulus, estimated to be over 7.5 trillion yuan (CNY), has been widely perceived as uber-bullish for bitcoin and other risk assets. Bitcoin, however, remains flat-lined at around $64,000 in the wake of the China stimulus, extending a six-month-long consolidation between $50,000 and $70,000.
Beijing's Bazooka is also drawing capital from other Asian equity markets. "We are trimming our long positions across Asia to fund China purchases," Eric Yee, senior portfolio manager at Atlantis Investment Management in Singapore, told Bloomberg.
Temporary shift
According to Chong, the capital shift is likely to be temporary and investors will eventually refocus on cryptocurrencies.
"This shift is likely to be temporary. Once the peak of the recent upward move in Chinese equities stabilizes, we can expect to see a redeployment of capital back into crypto. This is a prime example of the maturing mindset of investors who are willing to move across asset classes to optimize their returns," Chong said.
Traditional market analysts believe Bejing's latest stimulus falls short of addressing the real economic issues and may not lead to a long-lasting rally in Chinese stocks.
"Looking beyond the near-term sentiment boost, the effectiveness of the measures could fade unless some fundamental issues are addressed. The key one is fixing damaged balance sheets – especially those of the banks. Until that happens, any attempts to boost borrowing and leveraged risk-taking are likely to fail," TS Lombard said in a note to clients on Oct. 2.
The firm added that the latest measures are only 1.5% of China's gross domestic product, as opposed to 32% in 2008 and 22% in 2015-16, saying the spillovers from the stimulus are unlikely to be large this time.
BCA Research voiced a similar opinion last week, saying the rally in China's stocks may not have legs.
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Exchange Review - March 2025

CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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