A potential yuan devaluation could drive Chinese capital into Bitcoin, echoing trends seen during previous trade tensions
China’s possible devaluation of the yuan in response to sweeping U.S. tariffs could spark a fresh wave of capital flight into Bitcoin and other cryptocurrencies, according to BitMEX founder Arthur Hayes.
Hayes suggested Monday that the Federal Reserve, or the Chinese central bank, might be the key driver behind the next major phase of the crypto bull market.
The comment refers to a potential shift in global liquidity, where Chinese investors turn to cryptocurrencies as a store of value.
Past yuan devaluations offer clues about what might come next
The idea that Chinese capital could shift into crypto during periods of macroeconomic stress has been seen before.
When China devalued the yuan by nearly 2% in August 2015, Bitcoin demand climbed significantly.
A similar trend followed in August 2019, when the yuan fell below the psychologically important 7:1 ratio against the U.S. dollar. In that same week, Bitcoin surged by 20%.
That historical pattern may now be repeating. In a recent X post, Bybit CEO Ben Zhou said that if China responds to U.S. tariffs by weakening the yuan, crypto could benefit again.
Analysts have long viewed crypto as a hedge against fiat volatility and capital controls, especially in China, where strict limits on overseas investment make it a tool for wealth preservation.
Grayscale highlighted this dynamic in a 2019 report, citing “yuan depreciation concerns” as a key reason behind that year’s spike in Bitcoin prices.
If the People’s Bank of China does pursue a devaluation strategy, it’s expected that Chinese investors will once again turn to crypto, not just to protect purchasing power but to move capital beyond regulatory reach.
Tariffs, inflation fears, and a fragile moment for crypto market
The renewed attention on Chinese monetary policy is unfolding against a backdrop of intensifying global trade tensions.
On Monday, President Donald Trump threatened to impose an additional 50% tariff on Chinese imports if Beijing fails to remove its own 34% retaliatory tariffs.
The new measures are set to take effect April 9, raising concerns over rising stagflation risks and investor flight from risk assets.
Markets reacted promptly, with Bitcoin tumbling below $75,000, wiping out $1.3 trillion in total crypto market value amid a wave of forced liquidations.
Crypto-related equities also sank, with Coinbase and MicroStrategy falling 4% and 3% respectively, while gold and the Japanese yen climbed as investors sought safety.
Federal Reserve Chair Jerome Powell added to the caution last week, warning that the escalating tariff regime is “likely to raise inflation in coming quarters”.
Both JPMorgan and Goldman Sachs responded by increasing their recession risk forecasts, citing tightening financial conditions and slowing global demand.
In this already volatile environment, any move by China to weaken the yuan could amplify pressure on crypto markets.
If historical trends of capital flight repeat, Bitcoin and other digital assets may once again become the destination for wealth-seeking exit.
“It worked in 2013, 2015… and it can work in 2025,” Hayes noted in his X post.
