Chinese Monetary Authorities Could Boost Bitcoin and Cryptocurrency Market with Credit Injection
According to Arthur Hayes, co-founder of BitMEX, Chinese monetary authorities might be preparing to flood the country’s economy with credit, which could have a positive impact on bitcoin and the wider cryptocurrency market. In a recent blog post, Hayes outlined several factors that could prompt China to increase yuan credit significantly.
Interplay between the U.S. Dollar and Chinese Yuan
Hayes explained how U.S. monetary policy is creating favorable conditions for Chinese authorities to issue large amounts of new credit to their struggling property sector. He noted that the weakening of the dollar due to increased Treasury bill issuance has provided China with more room to use their money printer. As a result, the yuan could potentially strengthen compared to the dollar while China increases onshore yuan credit.
Influx of Capital and its Potential Benefits for Bitcoin
This global monetary dynamic could benefit bitcoin and the cryptocurrency market as a whole. Hayes suggested that an influx of capital from mainland China into risk assets, including bitcoin, could occur if there is a legal way to transfer cash from the mainland to Hong Kong. Additionally, as global demand for dollar credit and liquidity decreases with ample yuan credit, fixed supply assets like bitcoin and gold may rise in value when priced in dollars.
Hayes’ Crypto Investment Strategy
Considering this forecast, Hayes expressed his intention to focus on crypto investments rather than investing in U.S. Treasury bills. He plans to move his funds out of T-bills and into cryptocurrencies before it becomes evident through data that China is significantly increasing its money supply.
Arthur Hayes thinks Chinese monetary authorities might be getting ready to flood the nation’s economy with credit, bolstering bitcoin and the broader cryptocurrency market as a result.
“Let’s take a look at how the Middle Kingdom is about to throw gasoline on the raging fire that is the incipient crypto bull market,” the BitMEX co-founder said in a blog post on Monday.
Hayes outlined a confluence of factors that could prompt China “to flood the world with yuan credit.” In his blog post, he outlined how this influx of capital could end up boosting bitcoin.
Hot Take: Chinese Monetary Authorities May Ignite Crypto Bull Market
Arthur Hayes, co-founder of BitMEX, believes that Chinese monetary authorities are preparing to inject credit into their economy, potentially benefiting bitcoin and the broader cryptocurrency market. He explained how the interplay between the U.S. dollar and the Chinese yuan creates favorable conditions for China to increase yuan credit significantly. This influx of capital could lead to an increase in risk asset purchases, including bitcoin, and a rise in fixed supply assets like bitcoin and gold when priced in dollars. Hayes plans to focus on crypto investments rather than investing in U.S. Treasury bills as he anticipates China’s money printer going “brrrrr.”
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