BitMEX CEO: Yuan Depreciation Could Lead to the Beginning of Another Epic Bitcoin Bull Market

  • $1Bln successful BItfinex IEO means traders feeling good about itself and the market
  • Fed and POBCs commitment to increase balance sheet size, Positive for Bitcoin
  • A sudden & sharp depreciation will start Bitcoin’s another rally to moon

In its latest newsletter, Bitcoin derivatives exchange BitMEX’s co-founder and CEO, Arthur Hayes talks about how ICO market is down about 97 percent in Q1 of 2019 (YOY) which has resulted in changing the letter C to E as the new trend Initial Exchange Offerings (IEOs) permeates the market.

Given the fact that Bitfenix has been able to raise the largest ever IEO in under two weeks, this is the sign that the community is feeling good and positive about the market.

“Traders spent the last two years repairing their balance sheets. They are striking out now at the new shiny bauble. Buckle up, buckaroos!”

One of the interesting parts of this newsletter has been the section on China titled, “Let's Go Choyna!” where it talks about how the ongoing trade war between the US and China would lead to another enormous bull rally.

Apart from making his prediction of Trump “to wipe the floor with the Democrats in 2020,” he shares how this trade war will lead China’s President Xi Jinping to resort to print money to continue to support the heavy industry and manufacturing in order keep the demand going and factory workers employed.

Fed and POBCs Commitment to Increase Balance Sheet Size

Now moving forward, he says the Fed and PBOC will increase the size of their balance sheets in 2019 which will be positive for the leading cryptocurrency.

“Bitcoin is a monetary asset, and the flow of money and credit is crucial to understanding how the price will perform in the future,”

said Hayes.

So, his focus is China as the scale of its credit creation each year dwarfs any other country’s ever. Additionally, he points out that Chinese people have “no illusion about what is actually happening” and they do not trust the government.

A Sudden & Sharp Depreciation will Start Bitcoin Rally

Since the 1980s, China has devalued Yuan multiple times and PBOC has been keeping it relatively stable since early 2017. They have even made moves to tighten the credit conditions but Hayes points out how trade has changed that and now they are onto printing money.

Just recently, CNY suddenly went higher towards 7.00 that saw Bitcoin more than doubling. And as we can see in the chart, previously as well Bitcoin has performed well during periods of Yuan depreciation.

However, major Chinese exchanges no longer offer Bitcoin/CNY trading and Chinese traders need to obtain BTC in OTC markets.

Zhao Dong, the largest OTC trader in China was also one of the factors involved in the successful $1 billion LEO IEO of Bitfinex.

“The key number is 7.00. If the PBOC allows the Yuan to break this level, ordinary Zhou’s will scramble to get their hands on Bitcoin and other cryptos. Similar to 2015, a sharp and sudden Yuan depreciation could lead to the beginning of another epic bull market,”

concludes Hayes.

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