- Arthur Hayes, co-founder of BitMEX, points to a potential devaluation of the Chinese Yuan in his recent X post, suggesting it might lead to a significant influx of Chinese capital into Bitcoin.
- This pattern has been observed in both 2013 and 2015, and Hayes believes it could repeat itself in 2025.
- A report from 2019 reinforces this idea, indicating that Chinese investors resorted to Bitcoin during the capital flight restrictions imposed in 2017.
Arthur Hayes stressed a potential devaluation of the Chinese Yuan in a post on X, implying that it could trigger an outflow of Chinese capital into Bitcoin. He argues that this trend was evident in 2013 and 2015, and could manifest again in 2025. Supporting his view, a 2019 report noted that, during capital flight restrictions in 2017, Chinese investors turned to Bitcoin.
Potential Spike in Bitcoin Demand Due to Yuan Devaluation
In a recent post on his social media account, Hayes mentioned that a devaluation of the Chinese Yuan could prompt an exodus of capital into Bitcoin.
“If it’s not the Fed, it could be the PBOC providing us with the necessary ingredients,” he stated.
“A CNY devaluation suggests that Chinese capital flight might flow towards $BTC,” he elaborated in his post.
He further noted, “This pattern worked in 2013 and 2015, and it can work again in 2025.”
If not the Fed then the PBOC will give us the yachtzee ingredients.
CNY deval = narrative that Chinese capital flight will flow into $BTC.
It worked in 2013, 2015, and can work in 2025.
Ignore China at your own peril. pic.twitter.com/LAOeQZEjZt
— Arthur Hayes (@CryptoHayes) April 8, 2025
Looking back at 2013, China’s economic growth brought about worries regarding capital outflows due to a heavily regulated financial system. To maintain export competitiveness, there were instances of slight devaluation and relaxation of controls. During this time, Bitcoin garnered significant interest in China as a hedge against the weakening Yuan and a means to circumvent strict capital controls (individuals are limited to $50,000 in foreign currency exchange each year). As Bitcoin became regarded as a speculative asset, a growing number of Chinese investors began investing heavily.
By late 2013, the exchange BTC China topped global trading volume for Bitcoin, a testament to the demand increase. The price of Bitcoin opened that year at $13, skyrocketing past $1,000 in November and peaking at $1,163 in early December. However, the PBOC intervened that December, prohibiting financial institutions from engaging in Bitcoin transactions, which led to a significant market correction. Bitcoin ended the year at $732.
In a similar scenario in 2015, the PBOC executed a considerable devaluation of the Yuan, dropping its reference rate against the USD by approximately 1.9%—the most significant single-day decline in decades. This Yuan devaluation prompted a resurgence of interest in Bitcoin among Chinese investors.
Bitcoin began 2015 around $321, having fallen from its 2013 peak due to events like the Mt. Gox hack and regulatory pressures. After the Yuan’s devaluation, Bitcoin’s price started to rise, hitting $502. By early 2016, Bitcoin had more than tripled from its August 2015 low, exceeding $900 by year-end.
In 2017, the Yuan faced ongoing pressure following further devaluations in 2016. Amid a crackdown on capital outflows targeting traditional investment methods like real estate, investors sought alternatives such as Bitcoin. Chinese exchanges like Huobi, OKCoin, and BTC China together accounted for over 90% of global Bitcoin trading volumes.
“However, toward the end of 2017, the Chinese government imposed strict regulations on Bitcoin, banning cryptocurrency exchanges, which triggered a sharp market crash from $19k to $3k,” Hayes noted.
History suggests that fears of Yuan devaluation have often led to a shift of Chinese capital into Bitcoin, enhancing BTC’s positive outlook and its price dynamics. This pattern has mirrored the perception of Bitcoin as a safeguard against Yuan weakness. Should this trend persist, the scenario proposed by Hayes—that Chinese investors could once again flock to Bitcoin as a means of preserving wealth—could unfold. Nevertheless, issues such as China’s current regulations on cryptocurrency, the state of global markets, the US-China trade tensions, and tariff strategies could significantly influence the outcome.