Some analysts suggested that Chinese investors were using Bitcoin as a hedge as the asset jumped 20% in the first week of that month. In 2019, crypto asset manager Grayscale noted the depreciation in the Chinese yuan at attributed it as a factor that spurred Bitcoin markets at the time. Currency control avoidance and wealth preservationWealthy Chinese citizens may have used crypto in the past to preserve their wealth, move it beyond government reach, and avoid capital controls and restrictions within the country, according to analysts. It is also believed that currency devaluations also damage trust in central banks and government financial management, pushing people toward decentralized alternatives like Bitcoin.
Hayes said that if the Chinese central bank devalued its currency, the yuan, the “narrative [is] that Chinese capital flight will flow into Bitcoin,” adding that “it worked in 2013, 2015, and can work in 2025.” Bybit co-founder and CEO Ben Zhou said that China will try to lower the yuan to counter the tariff, adding that historically, whenever the yuan drops, “a lot of Chinese capital flows into BTC,” which is bullish for Bitcoin (BTC).
China’s response to America’s sweeping trade tariffs could result in capital flight to Bitcoin and crypto, according to BitMEX founder Arthur Hayes.“If not the Fed [Federal Reserve], then the PBOC [People’s Bank of China] will give us the Yahtzee ingredients,” said Hayes on X on April 8 in reference to the catalyst needed to resume the crypto market bull run.
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Author / Journalist: Cointelegraph by Martin Young
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