Crypto veteran Arthur Hayes thinks upcoming Chinese monetary policy will boost the price of Bitcoin (BTC).
Hayes notes in a new analysis that BTC’s price “will soar” as long as fiat money is printed, regardless of who the recipient is.
“The rhetoric right now from financial analysts is that the announced Chinese stimulus measures are still not enough to right-size the economy. That is true, but tucked inside the recent announcements are clues that China, directed by President Xi, stands ready to inject the monetary chemo to cure their deflationary cancer. That means that Bitcoin will soar on a secular basis as China reflates its banking system and property sector. Given that the Chinese property bubble was the largest in human history, the amount of yuan credit created will rival the sum of dollars printed in the US in response to COVID in 2020–2021.”
The BitMEX founder notes, however, that such policies take time to implement and the market won’t instantly recognize the impact and increase the price of Bitcoin.
“It takes time for chemo to kill the patient. During these initial stages, Chinese savers are reacting as I would expect: by buying oversold domestic equities and heavily discounted flats. It isn’t obvious to the world yet that this is the policy Xi has decided to pursue. But give it time, and the effects will be undeniable.
The fact economists are bearish on the size and scale of the stimulus so far presents a great buying opportunity. Because when the average wealthy coastal living Zhou decides they must have Bitcoin at any yuan price, the upside price volatility will harken back to August 2015, when, after a shock yuan devaluation by the PBOC, Bitcoin went from $135 to $600 — an almost 5x pump in under 3 months.”
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