BitMEX co-founder Arthur Hayes believes that China’s growing debt presents a special chance for Bitcoin to solidify its position as a hedge against currency devaluation. As China’s fiscal policies put further pressure on its currency, the yuan, Hayes contends that Beijing’s projected debt expansion—totaling about $1.4 trillion—could have a significant impact on Bitcoin demand and pricing.
According to reports, the Chinese government is thinking of implementing this massive debt program to help local governments that are struggling financially. Should the debt package proceed, the additional currency pressure would encourage Chinese investors to consider Bitcoin as a hedge, which might increase the cryptocurrency’s value. With the potential for higher price volatility as Chinese customers swarm to the cryptocurrency, Hayes says that this is the perfect time to invest in Bitcoin.
Hayes bases his perspective on historical trends. When the People’s Bank of China (PBOC) devalued the yuan in 2015, he remembers, Bitcoin experienced a huge spike, rising from $135 to $600 in only a few months. He also thinks that Bitcoin may experience a similar spike as Chinese investors seek to protect their wealth from additional currency devaluation.
Asian investor interest in Bitcoin has been especially notable since it just crossed $70,000 for the first time since June. Analysts anticipate that Asian purchasers will continue to propel Bitcoin’s upward price momentum. Additionally, market analysts predict that options trading and the US election results will bolster investor excitement, potentially driving Bitcoin to $80,000 by the end of the year.
According to Hayes, China’s mounting debt might actually increase demand for Bitcoin, enhancing its allure as a worldwide hedge against inflation and exchange rate fluctuations. Bitcoin may be poised for additional price increases and a likely new all-time high as a result of this anticipated surge in demand from Asian investors.
