China’s response to the tough series of US import tariffs could trigger a capital flight toward Bitcoin and crypto, according to BitMEX founder Arthur Hayes. “If the US central bank fails, the Chinese central bank will provide us with the ingredients for a bull market,” Hayes said.
How can China save the Bitcoin bull market?
Hayes’ argument regarding China is based on historical developments from 2013 and 2015. “When the Chinese central bank devalues ​​its currency, Chinese capital is expected to flow into Bitcoin. This worked in 2013 and 2015 and could work again in 2025,” says Hayes.
Ben Zhou, co-founder and CEO of Bybit, also expects China to try to weaken the yuan in response to the tariffs. Historically, a lot of capital flows into Bitcoin when the yuan falls, says Zhou.
Since 2022, the Chinese yuan has lost significant value against the US dollar. While Bitcoin performed well after the 2022 bear market, the relationship described by Hayes and Zhou is not clearly visible in the chart.
In 2022, the yuan lost massive value, while Bitcoin was still on its way to a low of $15,500. It therefore remains to be seen whether the development predicted by Hayes will actually materialize.
Bitcoin as a lifeline for Chinese
Several analysts believe that Bitcoin can play a crucial role in helping Chinese people protect their wealth from government interference.
By shifting their capital into Bitcoin, the government can theoretically no longer access it. This allows capital controls and other domestic restrictions to be circumvented – so the argument goes.
It is also believed that a devaluation of state currencies means that central banks and governments will force people to seek alternatives like Bitcoin.
So, at least, we have a potentially positive narrative for Bitcoin again. For now, however, the most important thing seems to be that the uncertainties on the global financial scene disappear.
As long as Trump continues his trade war and the economic outlook continues to deteriorate, it will be difficult for Bitcoin to reach new all-time highs.
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