Chinese investors’ record borrowing to buy stocks highlights surging global risk appetite — a trend that could ripple into Bitcoin markets.
Margin debt in China has soared to 2.28 trillion yuan ($320 billion), surpassing the 2015 peak. According to Bloomberg, this surge reflects a sharp rise in risk-taking. The Shanghai Composite Index has gained 15% this year, while the CSI 300 Index is up 14%. Still, analysts warn this rally is unfolding against a backdrop of economic slowdown and growing deflationary pressures.
Margin trading, which allows investors to borrow money to purchase shares, is a key measure of market risk appetite. Yet, forward earnings forecasts for Chinese companies have slipped 2.5%, raising concerns that debt-fueled bets could be more fragile amid weakening demand and pricing power.
In crypto, there is no standardized margin debt metric, but perpetual futures funding rates provide a glimpse into leverage appetite. For the top 25 digital assets, current rates sit between 5% and 10%, suggesting investors are cautiously bullish with controlled leverage. However, any unwinding of China’s record stock market debt could trigger global volatility — with direct implications for Bitcoin and other cryptocurrencies.
