China’s Yuan Impact on Bitcoin: Crypto Momentum Unleashed

Bitcoin, China, and the Tug-of-War of Global Finance

In the intricate dance of global finance, few forces ripple across markets with as much power as geopolitical tensions and macroeconomic policy shifts. As hints of a reigniting Bitcoin bull market stir once more, many eyes are now turning east—to China—and particularly, to the People’s Bank of China (PBOC). According to BitMEX founder Arthur Hayes, it may not be the U.S. Federal Reserve this time that acts as a spark for crypto’s resurgence, but China’s central bank instead, potentially delivering the catalyst that reignites digital asset fervor.

Hayes expressed his insights on April 8 via social media, casting the PBOC as the wildcard in what he metaphorically dubbed a potential “Yahtzee” moment for crypto—an unexpected convergence of circumstances leading to explosive growth. “If not the Fed, then the PBOC will give us the Yahtzee ingredients,” he said on X, formerly Twitter, suggesting that actions from the Chinese monetary authorities could create conditions ripe for a Bitcoin bull run. His theory stems from a recurring pattern observed over the past decade: when the Chinese yuan weakens, capital tends to flow not only out of China but into decentralized assets like Bitcoin.

Indeed, this pattern has precedent. Hayes points to historical instances where capital flight from China gave Bitcoin a significant boost—in 2013, 2015, and again in 2019. During those moments of yuan devaluation, investors, looking for safe and accessible stores of wealth beyond China’s financial borders, often turned to crypto. Hayes argues that history could very well repeat itself in 2025, should the yuan once again come under pressure.

This perspective is shared by Bybit co-founder and CEO Ben Zhou, who noted that China’s most likely response to impending U.S. tariffs would be letting the yuan depreciate. Zhou explained that every time the yuan weakens, “a lot of Chinese capital flows into BTC,” emphasizing how such movements have historically been bullish for Bitcoin. This dynamic, if it plays out again, may offer support to the cryptocurrency just when it needs it most, potentially offsetting broader market headwinds.

To understand why the yuan matters so much, it’s important to revisit key moments in recent history. In August 2015, China executed a surprise currency devaluation of nearly 2% against the U.S. dollar—its largest single-day drop in decades. While the relationship between that event and Bitcoin’s rise was debated, interest in the cryptocurrency did spike in its wake. Fast forward to August 2019, and the yuan breached the psychologically significant 7:1 ratio against the dollar. That same week, Bitcoin’s price jumped by roughly 20%. Analysts at the time pointed to investors potentially using Bitcoin as a hedge against further yuan weakness.

Crypto investment firm Grayscale weighed in back then, linking yuan depreciation to increased Bitcoin demand, underscoring the idea that geopolitical instability and currency fluctuation can drive investors to seek refuge in decentralized financial instruments.

But what’s truly driving these flows? It goes beyond just currency speculation. According to multiple analysts, Chinese capital flight into Bitcoin is often a by-product of deeper motivations: the avoidance of capital controls, preservation of wealth, and diminishing trust in centralized financial institutions. In a system where strict controls govern fund transfers abroad and where financial surveillance is intensive, cryptocurrencies offer an alternative—one that’s harder to trace, legislatively ambiguous, and resistant to unilateral control.

In times of sharp yuan devaluation, confidence in the capabilities of central banks and government economic stewardship often suffers. This loss of trust acts as a wind beneath Bitcoin’s wings, pushing citizens toward trustless, decentralized alternatives. When economic conditions make holding domestic assets less attractive, Bitcoin’s appeal as borderless digital gold grows stronger.

Recent developments suggest we may be entering another one of these inflection points. On April 7, the U.S. administration announced plans to escalate trade tariffs against China in a move unlikely to be met with silence. The Chinese Commerce Ministry responded swiftly and pointedly, declaring it would “fight to the end” and vowed to implement “countermeasures to defend its own interests.” With tensions mounting and economic retaliation on the horizon, China may once again turn to currency devaluation as a strategic lever. And as both Hayes and Zhou have indicated, that could set the stage for the next wave of crypto momentum.

Interestingly, this theory gained even more credence after the false circulation of a $2 trillion tariff package briefly pumped the crypto markets. The episode, while based on incorrect information, served as an indicator that the “market is ready to ape”—or respond with vigor—to even the suggestion of macroeconomic catalysts. It highlighted an underlying hunger among traders and investors for a new narrative to fuel upward momentum.

In the end, whether driven by monetary policy in Beijing, a weakening yuan, or escalating trade tension between the world’s two largest economies, one thing seems to be clear: the next leg of Bitcoin’s journey may be molded not from Silicon Valley or Wall Street, but from decisions made in the halls of the PBOC. And if patterns from 2013, 2015, and 2019 are anything to go by, Bitcoin’s role as a haven asset in turbulent times is far from over.