Arthur Hayes, co-founder of BitMEX and chief investment officer of digital asset fund Maelstrom, predicts in his latest article that China will adopt quantitative easing (QE) and other stimulus measures to tackle deflationary pressures moves that could significantly boost Bitcoin’s growth.
Hayes argues that as China increases its money supply to address economic challenges, Bitcoin will emerge as a hedge against currency depreciation. The influx of liquidity, he suggests, will create an environment where Bitcoin is viewed as a store of value and protection from the weakening of the yuan.
China’s Economic Pressures and the Case for QE
China has been grappling with deflationary pressures in recent years, with sluggish growth, a cooling property market, and weakening consumer demand posing significant risks. While Chinese policymakers have thus far avoided large-scale QE similar to that seen in the U.S. and Europe, Hayes believes economic realities will force a policy shift toward more aggressive stimulus measures.
“China will eventually join other major economies in deploying quantitative easing to stimulate growth,” Hayes writes. He notes that as the Chinese government introduces liquidity injections and fiscal stimulus, the resulting expansion of the money supply will likely erode the yuan’s purchasing power.
Bitcoin as a Hedge Against Depreciation
According to Hayes, Bitcoin stands to benefit from China’s move toward QE. “As fiat currency depreciates, Bitcoin offers an effective hedge, functioning as a store of value and inflation-resistant asset,” he explains. With investors seeking protection from currency devaluation, Bitcoin adoption may accelerate, both domestically and globally.
Hayes points to the increasing institutional acceptance of Bitcoin as a further reason why the cryptocurrency is poised to thrive. “The interplay between liquidity-driven market conditions and Bitcoin’s fixed supply is favorable for long-term price appreciation,” he adds.
Global Impact of China’s Policy Shift
A shift in China’s economic policy could have global implications for financial markets. If Chinese capital flows into Bitcoin and other digital assets rise, it may further legitimize cryptocurrencies as essential components of a diversified portfolio.
Hayes concludes that China’s move toward QE is not a question of “if,” but “when,” and that Bitcoin will be a key beneficiary of this transformation. “When China begins printing, the market for Bitcoin will explode,” he predicts.
This forecast aligns with broader market expectations that liquidity-driven assets like Bitcoin will thrive as major economies continue expanding their money supplies in response to economic pressures.
