Arthur Hayes has suggested that Chinese financial authorities might be preparing to bolster the country’s economy with credit, which could in turn support Bitcoin (BTC) and the broader cryptocurrency market.
Chinese Echoes in Cryptocurrency
BitMEX co-founder highlighted that factors could lead China to “flood the world with yuan credit”. The CIO of Maelstrom and former BitMEX CEO explained how US monetary policy has created more favorable conditions for Chinese officials to issue significant new credit to their beleaguered real estate sector.
He described the US’s recent policy as weakening the dollar by issuing more Treasury bonds. He noted that the effect of this policy is now clearly visible through the decline of the dollar index DXY throughout November. Arthur Hayes argued that the weak dollar provides Chinese officials with more space to press on the yuan printing presses. The expert shared the following statements:
Despite the printing presses going crazy against the dollar, the yuan could at least remain stable and even gain in value.
Hayes mentioned that conditions are developing for the yuan to actually strengthen as the dollar continues to weaken. The BitMEX founder underlined:
This gives China the leeway to significantly increase the amount of onshore yuan credit without weakening its currency.
“Interest in Bitcoin Could Increase!”
Arthur Hayes stated that this global monetary dynamic could benefit Bitcoin and the cryptocurrency market. He highlighted the possibility of capital inflows to risk assets from mainland China using Hong Kong as a proxy:
If there is a way to legally move cash from the mainland to Hong Kong, Bitcoin will be one of many risky assets to be purchased. Considering the dollar is the world’s largest funding currency, if the price of credit falls, all fixed supply assets like Bitcoin and gold will increase in terms of dollar price.
The BitMEX co-founder concluded his remarks by stating that he plans to focus on crypto investments instead of investing in US Treasury bonds, as his prediction supports risky assets:
I will continue to move money from Treasury bonds to cryptocurrency because I want to get in now before the data showing where China’s money printer is heading becomes clearly apparent.
- Chinese monetary strategy could boost Bitcoin.
- Weak dollar gives leeway to China’s yuan.
- Global dynamics may favor crypto investments.