Arthur Hayes, co-founder of BitMEX, shares his analysis on the possible Bitcoin rally connected to central banks' actions, particularly the PBOC.
PBOC Liquidity as a Catalyst
Hayes points out the actions of central banks, focusing on the PBOC and the U.S. Federal Reserve. If the Fed decides not to increase liquidity, this could create conditions for the PBOC to become the initiator of a Bitcoin rally. There's a likelihood of yuan devaluation, potentially leading to capital flight from China, which would increase interest in Bitcoin as a safe asset.
Historical Examples: Yuan Devaluation and Bitcoin
Hayes cites historical instances when yuan devaluation coincided with price increases in Bitcoin. In 2013 and 2015, significant rises in Bitcoin's market value were linked to capital flight from the yuan. These events highlight the importance of the connection between China's economic situation and the cryptocurrency market.
Potential Recurrence in 2025
Hayes predicts that similar conditions may arise in 2025. He mentions global economic uncertainties and the need to monitor central banks' actions. Given Bitcoin's development as an asset and its growing interest, a repeat of the yuan devaluation frenzy could initiate another rally.
Arthur Hayes' predictions regarding a Bitcoin rally fueled by PBOC liquidity and yuan devaluation underscore the interconnectedness of the global economy and cryptocurrency markets. Attention to China's actions may be a key factor in successful investing in crypto assets.
