A-shares rise and "suck blood" from the crypto market? When will the bull market in the crypto world arrive?

On October 8, the three major A-share indices opened with a collective surge, with the Shanghai Composite Index rising more than 10% at one point, surpassing 3,500 points. The Shenzhen Component Index also increased by over 10%, while the ChiNext Index soared by more than 16%. Over 5,000 stocks in the two markets and the Beijing Stock Exchange were in the green, with many stocks in the real estate sector hitting the daily limit right at the opening.

The hot A-share market has attracted a large number of retail investors rushing to enter the market. According to reports, during the National Day holiday, at least 60 brokerage firms arranged for staff to be on duty at their offline branches, and online account opening services provided uninterrupted support 24/7. Market data shows that since the policy package was introduced on September 24, the three major A-share indices have collectively surged, with the Shanghai Composite Index having risen a total of 21%, showcasing a prosperous stock market.

Is the A-share market "sucking blood" from the crypto market?

While the A-share market is in a frenzy, the crypto market remains sluggish. Bitcoin, which is highly correlated with U.S. stocks, has failed to show a synchronized upward trend against the backdrop of the continuous rise of the three major U.S. stock indices. Since late September, Bitcoin's price briefly touched $66,500 before quickly retreating, falling to around $60,000 by early October. Although there has been some rebound since then, it has not returned to the levels seen before China's stimulus policies. This has sparked discussions in the market about whether the A-share market is "sucking blood" from the crypto market.

Currently, the OTC market price for USDT is 6.9 yuan, while the offshore RMB to USD trading price is 7.07 yuan, indicating a negative premium of 2.4%. This also suggests that some funds may have shifted from the crypto market to A-shares in search of short-term high volatility and policy-driven returns.

Bullish Outlook for the Crypto Market in October

Although the rise in the A-share market may have temporarily attracted some funds from the crypto market, there are no clear signs indicating a large-scale capital shift towards A-shares. Most market analysts believe that the current capital flow is temporary. As the Chinese stock market gradually stabilizes, investors may reassess risks and returns, and some funds are expected to flow back, injecting new vitality into Bitcoin and other crypto assets.

The unique appeal of the crypto market lies in its high-risk, high-return characteristics, as well as its decentralized and global investment philosophy. Despite the current market lacking clear positive news to drive it, this intrinsic property of crypto assets still holds an irresistible charm, especially for funds seeking high speculative returns. Additionally, the relative inconvenience of entering and exiting the cryptocurrency market somewhat limits the rapid withdrawal of funds, leading to a tendency for capital to flow internally within the crypto market or remain on the sidelines.

Historically, October has often been a strong month for Bitcoin. Over the past decade, driven by improved market sentiment, increased adoption, and macroeconomic trends, Bitcoin has averaged a 22% increase in October. This year, with the launch of ETFs and the beginning of a rate-cutting cycle, the market generally expects that, under the combined influence of internal dynamics in the crypto market and external economic policies, Bitcoin will continue its traditional bullish trend in October, entering a new bull market cycle.

The short-term attractiveness of the A-share market has not changed the long-term bullish outlook for the crypto market. Of course, at turning points in market trends, it is essential to carefully consider reasonable asset allocation to balance risks and returns. 4E, as a one-stop comprehensive trading platform, covers various risk-level assets including cryptocurrencies, U.S. stocks, indices, foreign exchange, and gold, offering over 600 trading pairs, including currently popular Chinese concept stocks. Users only need to hold USDT to trade anytime via their mobile phones.

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