TechFlow reported on October 29 that Arthur Hayes, founder of BitMEX, stated in a recent blog post that China's economic stimulus measures will inject trillions of dollars into financial markets and drive up cryptocurrencies. Data shows that since August this year, the People's Bank of China has started purchasing government bonds for the first time since 2007, increasing its holdings of local government bonds from 1.5 trillion yuan to 4.6 trillion yuan.
Hayes analyzed that the PBOC may follow the policy paths of the Federal Reserve, European Central Bank, and Bank of Japan by expanding its balance sheet to address economic downturn pressures. He pointed out that this policy shift could mirror Bitcoin's market performance during the RMB adjustment period in August 2015, when Bitcoin's price surged from $135 to $600 in less than three months.
The report further noted that although Chinese investors are currently focused primarily on domestic stock and real estate markets, as the effects of monetary easing gradually emerge, Bitcoin could become an important asset allocation choice. Hayes believes that given China’s sustained high level of trade surplus and the gradual adoption of RMB settlement for commodity imports, monetary policy adjustments will not significantly impact the RMB exchange rate. Meanwhile, under current U.S. industrial policy direction, the U.S. dollar may continue its weak trend.
