$52 Billion Liquidity Injection Fails to Boost Bitcoin as Chinese Banks Face Capital Controls

China's central bank injected $51.7 billion into its banking system on Friday through an overnight reverse repo, but Bitcoin fell by 1.7% anyway.

This was the first mid-month use of this tool by the People's Bank of China (PBOC), and it has already scheduled three more injection days from August 17 to 19 with a ceiling of $88 billion each day.

The PBOC launched this tool on June 29 with $44 billion, and Bitcoin fell then too. The sample is small, but it suggests that Chinese liquidity injections may not directly impact the global cryptocurrency market.

Frances Cheung, head of foreign exchange and rates strategy at Oversea-Chinese Banking Corp., described Friday's move as 'tuning rather than easing.' Capital controls remain a barrier for Chinese banks sending reserves to offshore crypto markets, and domestic trading is still banned.