- Arthur Hayes says yuan devaluation by the PBOC could trigger a fresh Bitcoin bull market.
- Trump threatens 104% tariffs on China if 34% retaliatory hikes aren’t reversed by April 8.
- Past yuan drops in 2015 and 2019 led to notable surges in Bitcoin prices.
The growing tension between the U.S. and China over tariffs is increasingly seen as a trigger for a potential surge of capital flowing into Bitcoin and other cryptocurrencies. According to BitMEX founder Arthur Hayes, China’s reaction to America’s trade policies could lead to another cycle of capital flight into the crypto market.
On April 8, Hayes remarked on X, “If not the Fed then the PBOC will give us the yachtzee ingredients.” He referenced this as the catalyst needed for a new bull run in the crypto market. He believes that a devaluation of the Chinese yuan by the People’s Bank of China (PBOC) would spark a wave of capital flight into BTC, mirroring trends from 2013 and 2015.
Hayes also emphasized that a similar situation could unfold in 2025, saying the past devaluations had prompted Chinese investors to look to BTC as a store of value. If the Chinese central bank devalues its currency, the narrative is that “Chinese capital flight will flow into Bitcoin,” Hayes said, drawing on historical patterns.
US-China Tariff Battle Escalates
On April 7, President Trump made an announcement on his social media platform, Truth Social, stating that if China did not remove its 34% retaliatory tariffs, the U.S. would impose tariffs of up to 104% on Chinese goods. This new measure was set to take effect on April 9, 2025.
“If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote. His statement also included a declaration to halt all negotiations with China and instead focus on talks with other nations.
In response to the U.S. president’s announcement, China’s Ministry of Commerce issued a strong statement on April 8, expressing discontent with the proposed tariffs. “The so-called ‘reciprocal tariffs’ imposed by the United States on China are entirely groundless and constitute a typical act of unilateral bullying,” a Ministry spokesperson said. They made it clear that China would stand its ground and resist any further tariff hikes.
Yuan Devaluation Spurs Bitcoin Demand
China’s economic decisions, especially the yuan devaluation, have a clear impact on Bitcoin. For instance, in August 2015, when China devalued the yuan by nearly 2%, its value dropped sharply against the U.S. dollar. Around the same time, BTC’s price rose modestly.
Similarly, in August 2019, the yuan fell below the 7:1 ratio against the U.S. dollar, and Bitcoin’s price jumped by 20% in the same week. Analysts believe Chinese investors turned to Bitcoin as a hedge against the weakening yuan. Crypto asset manager Grayscale directly linked the surge in Bitcoin’s price to the yuan’s depreciation.
Wealthy Chinese citizens, seeking to protect their assets from government restrictions and capital controls, have often turned to decentralized alternatives like BTC. This trend is viewed by many analysts as a natural response to fears about the stability of central banks and the government’s ability to manage currency.
The shift toward Bitcoin becomes more pronounced when the trust in national financial systems erodes, especially when governments are perceived to be manipulating the currency. Historical patterns suggest that when the Chinese yuan devalues, as it has in previous years, more capital flows into BTC, driving the crypto market’s bullish momentum.
As of now, Bitcoin is trading at $79,021, marking a 2.29% increase over the past 24 hours, according to CoinMarketCap.
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