BitMEX founder Arthur Hayes has written an article explaining the potential impact of China’s increased money supply on Bitcoin. He predicts that China will adopt quantitative easing (QE) measures to combat deflationary pressures.
According to Hayes, Bitcoin will emerge as a hedge against currency depreciation as China increases its money supply. The influx of liquidity will create an environment where Bitcoin is seen as a store of value and is 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. While Chinese policymakers have avoided large-scale QE so far, Hayes believes economic realities will force them to implement more aggressive stimulus measures.
Hayes explains that as the Chinese government injects liquidity and implements fiscal stimulus, the money supply will likely erode the yuan’s purchasing power. This, in turn, will benefit Bitcoin as it acts as a store of value and an inflation-proof asset.
The adoption of Bitcoin could accelerate both domestically and globally as investors seek protection from currency devaluation. Hayes also highlights Bitcoin’s growing institutional acceptance as a factor that will contribute to its long-term price appreciation.
It’s important to note that this article does not provide investment advice.