China’s reaction to the extensive trade tariffs imposed by the United States could lead to a shift of capital towards Bitcoin and other cryptocurrencies, as suggested by BitMEX founder Arthur Hayes.
Hayes mentioned on X on April 8 that if the Federal Reserve does not act, the People’s Bank of China might provide the necessary conditions for a revival in the crypto market. He indicated that should China decide to devalue its currency, the yuan, it could create a situation where capital flows into Bitcoin, referencing past trends in 2013 and 2015, and predicting a similar outcome in 2025.
Ben Zhou, co-founder and CEO of Bybit, echoed this sentiment, noting that China might lower the value of the yuan to respond to the tariffs. Historically, whenever the yuan weakens, a significant amount of Chinese capital tends to migrate towards Bitcoin, which he views as a positive sign for Bitcoin’s price.
The yuan began to lose value against the US dollar in 2022. In August 2015, the currency was devalued by nearly 2% in a notable single-day decline, which coincided with heightened interest in Bitcoin, although experts remain divided on any direct causation.
When the yuan slipped below the critical 7:1 ratio against the US dollar in August 2019, Bitcoin also experienced price increases within that period. Analysts speculated that investors turned to Bitcoin as a hedge, with the asset soaring 20% in the first week of that month.
In 2019, a crypto asset management firm identified the depreciation of the yuan as a contributing factor to the momentum within Bitcoin markets during that time.
### Evading Currency Controls and Preserving Wealth
Wealthy individuals in China may have previously relied on cryptocurrencies to safeguard their assets, circumvent government oversight, and evade capital controls and limitations. Analysts suggest that currency devaluations erode trust in central banks and governmental financial strategies, driving people toward decentralized options such as Bitcoin.
On April 7, the US president announced plans to increase tariffs against China, to which the Chinese government responded by promising to “fight to the end.” The Chinese Ministry of Commerce stated that if the US pursues heightened tariff measures, China will firmly enact countermeasures to protect its interests.