BitMEX co-founder Arthur Hayes is from China Bitcoin He expressed his views on how capital can flow into his assets.
Posting a new analysis Arthur Hayes, highlighted that wealthy Chinese individuals and state-owned enterprises use banks in Hong Kong for international transactions. Hayes also noted that Hong Kong now has regulated crypto exchanges and brokers, which could spur new investments.
Bitcoin can also be interpreted as a Chinese phenomenon. Many of the largest Bitcoin miners started their operations in China. Prior to 2020, when BTC/CNY trading pairs existed, Chinese clients dominated global spot trading flows. Any wealthy Chinese on the coastline knows about Bitcoin and its promise as a store of value.
They have followed the currency from its infancy to now and have been active participants in its success. If there was a way to legally transport cash from the mainland to Hong Kong, Bitcoin would be one of many risky assets to buy.
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Hayes also noted that the Chinese government has spent the last few years trying to shift the country’s economy from supply-led to demand-led by making credit more expensive. According to Hayes, companies are responding to this policy change by borrowing overseas, increasing the value of the U.S. dollar and making credit more expensive around the world.
However, Hayes also underlined that this trend may be about to reverse.
This bid for dollar credit and liquidity will disappear as the Chinese banking system provides more abundant yuan credit.
Given that the dollar is the world’s largest funding currency, if the loan price falls, all fixed supply assets such as Bitcoin and gold will rise in dollar fiat price terms. The great thing about this macro leg of the rally is that it does not require Chinese companies and wealthy individuals to buy Bitcoin. The fungible nature of global fiat credit will dictate that marginal fiat dollars will flow into hard monetary assets like Bitcoin.