Arthur Hayes Chinas QE takes time Bitcoin keep going
Bitcoin returned to the 70,000 mark last night, and BitMEX founder Arthur Hayes released “Fueling Bitcoin,” discussing the current state of the Chinese economy and its impact on Bitcoin, as well as his optimistic view of Bitcoin’s future.
Current Situation of the Chinese Economy
China is facing the problem of a bursting real estate bubble, which has led to reduced economic activity and rising unemployment rates. As a result, the Chinese government has implemented the “Three Red Lines” policy to restrict excessive borrowing by real estate developers, further exacerbating the market’s difficulties.
The Chinese government is currently using quantitative easing (QE) and other monetary policy tools to stimulate the economy, including purchasing government bonds and injecting capital to support the banking system.
China’s P2P Market Active Again
Hayes believes that the Chinese are among the most resourceful people on the planet and they will not allow their valuable savings in RMB to remain idle in a situation where asset prices are encouraged to inflate in Beijing. Bitcoin is not a foreign concept to middle and upper-income residents in coastal cities, although these exchanges are prohibited from providing visible Bitcoin/RMB trading pairs, Bitcoin and cryptocurrencies are still thriving in China.
Hayes has heard that China’s P2P market is once again vibrant, with major Asian spot exchanges such as Binance, OKX, and Bybit doing business on the mainland. Local traders are assisting mainland residents in trading cryptocurrencies through the P2P message boards operated by the exchanges. Although Hayes is unable to showcase Bitcoin tracking products or related charts flowing into China due to data restrictions, he does know that stocks and real estate have performed below the growth of the central bank’s balance sheet.
QE Takes Time, Bitcoin Fueling
Hayes emphasizes that it takes time for the People’s Bank of China’s quantitative easing and the re-acceleration of bank credit growth to be realized, and the market cannot expect an immediate realization and immediate boost to Bitcoin. However, in these initial stages, the response of Chinese depositors is as he anticipated, buying oversold domestic stocks and heavily discounted apartments.
Hayes believes that now is a good buying opportunity because when the general affluent coastal population decides that they must own Bitcoin at any price, the upward price volatility will trace back to August 2015 when Bitcoin rose from $135 to $600 in less than three months after the People’s Bank of China significantly devalued the RMB, almost quintupling in value.
