BitMEX Founder Arthur Hayes has provided his insights on the impact of China’s increased money supply on Bitcoin. According to Hayes, China is likely to adopt quantitative easing (QE) measures to combat deflationary pressures.
Hayes believes that as China increases its money supply to address economic challenges, Bitcoin will emerge as a hedge against currency depreciation. The influx of liquidity will create an environment where Bitcoin is seen as a store of value and protected from a weakening yuan.
China has been facing deflationary pressures in recent years, with stagnant growth, a cooling property market, and weakening consumer demand posing significant risks. While Chinese policymakers have been avoiding large-scale QE like the US and Europe, Hayes predicts that economic realities will eventually lead to a policy shift towards more aggressive stimulus measures.
As the Chinese government implements liquidity injections and fiscal stimulus, the resulting expansion in the money supply is expected to erode the purchasing power of the yuan. In this scenario, Bitcoin is seen as a hedge against value loss. It acts as a store of value and an inflation-proof asset, providing protection from currency devaluation.
Hayes also highlights the growing institutional acceptance of Bitcoin as a reason for its potential to thrive. The combination of liquidity-driven market conditions and Bitcoin’s fixed supply is expected to contribute to long-term price appreciation.
It’s important to note that this article does not constitute investment advice.
