Bitcoin climbed past $97,000 on Wednesday before settling above $96,000, as a confluence of global monetary moves stirred markets ahead of the Federal Reserve’s policy announcement.
The cryptocurrency’s rally came hours after China injected about $138 billion into the economy through a broad stimulus package and after the US central bank executed back-to-back Treasury purchases totaling $34.8 billion.
Those developments, combined with renewed trade discussions between China and the United States, have sparked speculation about a return to quantitative easing and shifted global investor sentiment toward risk-on assets such as crypto.
China injects liquidity and cuts rates
At a press briefing hosted by the State Council Information Office, People’s Bank of China Governor Pan Gongsheng announced a 50 basis-point cut to the reserve requirement ratio (RRR), releasing roughly 1 trillion yuan (about $138 billion) in long-term liquidity.
The move was accompanied by a 10 basis-point reduction in the policy rate and a cut to the seven-day reverse repo rate from 1.5% to 1.4%.
The stimulus package also included a 500 billion yuan lending facility aimed at supporting eldercare services and boosting domestic consumption.
Additionally, mortgage rates were trimmed and reserve requirements for auto finance companies were relaxed.
These measures are intended to counter weakening domestic demand and support the ailing property sector.
The timing of the announcement was notable. It arrived just before the US confirmed that Treasury official Scott Bessent will meet China’s Vice Premier He Lifeng in Switzerland on the 10th and 11th.
The upcoming talks mark the first official trade negotiations since President Trump raised tariffs on Chinese imports to 145%.
Bitcoin and the S&P 500 react to global easing signals
Markets reacted immediately to the dual headlines of stimulus and diplomacy.
According to The Kobeissi Letter, S&P 500 futures climbed more than 1% while Bitcoin jumped above $97,000.
Bitcoin’s gains cooled later in the day, with BTC trading at $96,911 at the time of writing, up 2.93% over the past 24 hours.
Source: CoinMarketCap
Gold also rallied strongly, approaching record highs at $3,437.60 per ounce, up 28.84% year-to-date. The precious metal’s gains suggest investors are positioning for uncertainty ahead of the Federal Open Market Committee (FOMC) statement.
Fed’s bond purchases fuel QE speculation
To support market momentum, the Federal Reserve quietly purchased $34.8 billion in Treasuries over two days: $20 billion in three-year notes on May 5, followed by $14.8 billion in 10-year notes on May 6.
Those operations took place without any formal announcement signaling a policy shift.
The size and speed of the purchases have fueled speculation that the Fed may be testing the waters for a return to quantitative easing.
This follows months of cautious guidance from Chair Jerome Powell, who has said further easing or balance-sheet actions would depend on inflation dynamics.
Arthur Hayes, former CEO of BitMEX, suggested in a recent column that these moves could push Bitcoin to $250,000 by the end of 2025 if QE is formally reinstated.
Other analysts remain skeptical, noting the lack of systemic financial stress that would typically justify such measures.
Eyes on the Fed as markets seek clarity
The FOMC meeting later today will be watched closely for clues about the Fed’s policy stance.
A dovish pivot could help Bitcoin establish stronger support above $97,000, while a hawkish tone could increase volatility.
Investors remain cautious but alert, as coordinated central bank moves and renewed trade diplomacy suggest broader macro shifts may be underway.
Whether Bitcoin maintains its upward trajectory will largely depend on the message the Fed delivers in the coming hours.