Here’s what can push Bitcoin’s price even higher this year: Arthur Hayes

Chinese monetary expansion could drive wealthy investors into Bitcoin. If this trend materializes, it will end up repeating the cryptocurrency growth pattern following the 2015 yuan devaluation.

Arthur Hayes, the co-founder of BitMEX, predicts a significant increase in the value of Bitcoin driven by this change in monetary policy.

Bitcoin as a hedge

In his recent blog post, Hayes argues that despite official restrictions, cryptocurrency trading continues to thrive in mainland China through peer-to-peer networks on major exchanges such as Binance, OKX and Bybit. He points to Bitcoin’s historical outperformance of traditional assets during periods of monetary expansion, citing the dramatic rise from $135 to $600 in late 2015 following a devaluation of the yuan.

Although the Chinese authorities have banned direct trading of Bitcoin/CNY pairs, Hayes suggests that this was only to prevent Bitcoin from acting as a visible indicator of the currency’s degradation, noting that crypto ownership itself remains being legal in China.

Looking ahead, Hayes predicts that China’s planned monetary expansion and “reflation” efforts will push wealthy local investors toward Bitcoin as a hedge against currency devaluation. Despite this bullish forecast, Hayes acknowledged that this transition may take some time. His analysis even suggests that the initial response from Chinese investors has focused on domestic stocks and discounted real estate, but he expects attention to shift to Bitcoin as currency effects become more apparent.

However, Hayes predicts that mainland Chinese investors likely won’t be able to access Hong Kong Bitcoin ETFs, forcing them to rely on existing peer-to-peer networks for cryptocurrency exposure.

China’s new debt package

Hayes’ comment comes amid reports that China’s markets may see a significant boost as authorities consider injecting 10 trillion yuan, worth about $1.4 trillion, into the economy through issuing of debt

The massive stimulus package, which includes 6 trillion yuan in special sovereign bonds, is expected to receive approval from top lawmakers in the first week of November. The tax package, aimed at reviving China’s struggling economy, could be improved if Donald Trump secures the US presidency.

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