It has been revealed that there’s new capital waiting to flood into Bitcoin from China. Check out the latest reports about the matter below.
New capital flood for Bitcoin
Arthur Hayes, the co-founder of BitMEX, recently shared his thoughts on how China might invest in Bitcoin (BTC).
Hayes explained that wealthy individuals and state-owned enterprises (SOEs) in China often use Hong Kong-based banks for their international transactions.
Additionally, he noted that Hong Kong now has regulated cryptocurrency exchanges and brokers, which could attract more capital from China into the Bitcoin market.
“Bitcoin is a Chinese phenomenon. Many of the largest Bitcoin miners started their operations in China. Pre-2020, when BTC/CNY (Chinese yuan renminbi) trading pairs were available, Chinese clients dominated global spot trading flows. Any wealthy coastal Chinese person knows about Bitcoin and its promise as a store of value.
They have watched the currency from its infancy until the current moment and have been active participants in its success. If there is a way to legally move cash from the mainland to Hong Kong, Bitcoin will be one of many risk assets that will be purchased.”
According to the co-founder of BitMEX, Hayes, the Chinese government has been attempting to shift the country’s economy from supply-led to demand-led by making credit more expensive over the past few years.
As a result, firms have started borrowing money offshore, which has led to an increase in the value of the US dollar and made credit more expensive worldwide. However, Hayes predicts that this trend could soon reverse.
“That bid for dollar credit and liquidity will be removed as the Chinese banking system provides more plentiful yuan credit.
Given that the dollar is the world’s largest funding currency, if the price of credit falls, all fixed supply assets like Bitcoin and gold will rise in dollar fiat price terms. The great part about this macro pillar of bullishness is that it doesn’t require Chinese firms and wealthy individuals to buy any Bitcoin. The fungible nature of global fiat credit will dictate that the marginal fiat dollar will flow into hard monetary assets like Bitcoin.”
