TechFlow reports that Arthur Hayes, co-founder of BitMEX, said in a recent blog post that Chinese authorities may be preparing to inject substantial credit into the economy, which could boost Bitcoin and the broader cryptocurrency market. Hayes noted that the U.S. has recently "weakened the dollar by issuing more Treasury bills," an effect now evident as the dollar index declined throughout November. He believes this creates more favorable conditions for Chinese authorities to extend "massive" new credit to the struggling real estate sector. This global monetary dynamic could benefit Bitcoin and crypto markets. He stated that if China increases money printing, these funds will flow into global markets and support rising prices across all types of risk assets.
First, capital may flow from mainland China through Hong Kong into risk assets. Hayes added that if there is a legal way to transfer cash from the mainland to Hong Kong, Bitcoin would become one of many risk assets purchased. Second, due to "ample RMB credit," global demand for dollar-denominated credit and liquidity would decline. Given that the dollar is the world's primary funding currency, if credit costs fall, prices of all fixed-supply assets such as Bitcoin and gold would rise.
Hayes concluded that since this outlook favors risk assets, he plans to focus on crypto investments rather than U.S. Treasuries. He stated he will continue shifting his funds from U.S. Treasury bills into cryptocurrencies.
