China Stocks Drop, Crypto Funds Flow Back Stronger

Key Points:

• The MSCI Asia Pacific index suffers its most significant drop a month after a lack of economic stimulus.
• U.S. stocks fall as the VIX volatility index rises to 22 points, reflecting increased market uncertainty.
• Cryptocurrency volatility remains steady at 43%, indicating confidence as funds return to crypto investments.

Singapore-based crypto investment firm QCP Capital has commented on the recent fluctuations in the financial markets, particularly highlighting the fading rally in the China stock market following a week-long holiday.

QCP Capital Highlights China Stock Market Decline

According to a recent government briefing, there was a general expectation that no fresh economic stimulus measures would be announced. Without supportive fiscal policy, the MSCI Asia Pacific stock index decreased by the most significant monthly margin.

The rout in China stock markets sent ripples around the world. The U.S. market couldn’t avoid the selloff, and big tech stocks took it on the chin. Indeed, the US stock market registered a big drop overnight, pushing the volatility index—VIX—to 22 points, indicative of high market uncertainty.

Read more: China Urged To Rethink Crypto Policy As US Leads Bitcoin ETFs

Global Market Volatility Increases Amid Geopolitical Tensions

Cryptocurrency markets have been far more resilient to the turbulence. The front-end implied volatility of cryptocurrencies is changing hands at around 43%—3% points lower than the historical actual volatility of last week. Chinese investors might have been selling USDT to finance their stock purchases since late September, as reported by a Bloomberg report, but Bitcoin hasn’t budged during this time.