US-China tariff response means more money in crypto, according to Arthur Hayes, co-founder of BitMEX, who believes rising trade tensions and a weaker Chinese yuan may trigger fresh capital flows into Bitcoin.
As the standoff between Washington and Beijing intensifies, Hayes points to historical data from 2013 and 2015 showing that previous yuan devaluations led to strong surges in Bitcoin demand.
On Monday, President Donald Trump announced a new 50 percent tariff on Chinese goods, on top of existing duties totaling 54 percent. In response, Beijing imposed a 34 percent tax on U.S. imports, set to take effect Thursday. With the offshore yuan hovering around 7.35 per U.S. dollar, its lowest level in two months, Hayes sees a potential repeat of past patterns that favored Bitcoin.
Historical patterns suggest crypto surge
Hayes cited how Bitcoin reacted during earlier currency shifts. In 2013, after the yuan weakened, interest in Bitcoin skyrocketed. The price of Bitcoin rose from $13 to over $1,000, with BTC China becoming the top exchange by volume. A similar trend followed in 2015 after the People’s Bank of China devalued the yuan by more than 3 percent across three consecutive sessions. Bitcoin climbed from $350 in Q1 to $502 by the end of the year.
Hayes argues that if the yuan weakens again, Bitcoin could see another rally. He referred to this setup as a “Yachtzee” moment, where devaluation could trigger another wave of capital flight into digital assets.
Crypto as a hedge against the Yuan
Industry leaders supported Hayes’ view. Bybit CEO Ben Zhou stated that any drop in the renminbi has historically led to a rise in Chinese investment in Bitcoin. Crypto_BN also commented that Bitcoin is increasingly being used as a hedge against the yuan, aligning with the currency escape function envisioned by Bitcoin’s creator.
However, some experts expressed doubt, noting China’s strict crypto ban and banking restrictions. Capital may flow into stablecoins first, like USDT, before entering Bitcoin.
Risks of Yuan devaluation and capital flight
The international economic community believes extreme movements in the yuan exchange rate will drive large-scale capital exit and hurt market trust. According to Wells Fargo analysts, there is a 75 percent probability that the PBOC will intervene shortly. Ken Cheung from Mizuho Bank believes China will undertake this move gradually because the government wants to preserve exchange rates and limit funds leaving the country.