Crypto Markets Slide as China Stimulus Disappoints

The cryptocurrency market dipped on Tuesday as China's highly-anticipated monetary stimulus package fell short of expectations.

Bitcoin (BTC) fell by 2% to $62,500, and Ethereum (ETH) dipped 2.5% to $2,420. Solana (SOL) and Polkadot (DOT) declined by 4% and 2%, respectively.

On Monday, risk assets, including cryptocurrencies, rallied on hopes of an economic boost from China's government.

Investors were expecting detailed, robust stimulus measures from the Chinese government to bolster economic growth. However, Tuesday’s announcement offered few specifics, leaving investors underwhelmed. The briefing failed to provide concrete steps or substantial new policies to address the country's mounting economic challenges.

The most tangible part of the announcement was a plan to issue 200 billion yuan ($28 billion) for spending and investment projects by year-end. Many analysts felt this was far from sufficient.

"As the Chinese rally wanes, we anticipate capital reallocation back into crypto, reflecting the industry’s growing maturity as an alternative risk-on asset,” wrote QCP Capital, a digital asset trading firm.

Crypto markets were hit by the broader risk-off sentiment. Nearly 60,000 crypto traders were liquidated within the past 24 hours, resulting in $189 million in liquidations, per data from CoinGlass.

Bitcoin ETFs Shine as Ethereum ETFs Stall

On Monday, Bitcoin spot exchange-traded funds (ETFs) logged their highest inflows of the month, with $235.2 million added. Leading the charge was Fidelity's Bitcoin Exchange-Traded Fund (FBTC), which contributed $104 million, while BlackRock's iShares Bitcoin Trust (IBIT) followed closely with $98 million in inflows.

Spot Ether ETFs registered zero flows on Monday — the second time since their launch in July.

Meanwhile, U.S. stock markets traded higher on Tuesday morning, with the Nasdaq adding 1.1% and the S&P 500 gaining 0.8%.