Bitcoin (BTC) could see “significant inflows” from China in the coming months, driven by a weak Chinese yuan and one of the largest capital flight in years.
Markus Thielen, head of research and strategy at Matrixport, said: “As Chinese investors become more familiar with Bitcoin amid the domestic economic downturn, we are likely to see significant inflows into Bitcoin in the coming months. There is a gender,” he said.
latest official dataChina’s capital outflows reached $49 billion in August, the largest monthly capital outflow since December 2015, according to a Bloomberg summary, which could further increase pressure on the yuan.
China just experienced $49 billion in capital outflows last month, the largest outflow in more than seven years. pic.twitter.com/X4Or9k3Oiu
— Barchart (@Barchart) September 19, 2023
“The US dollar/renminbi exchange rate is trading at a 17-year high as China’s economic growth momentum appears weak while the US economy is expanding strongly,” Thielen said.
“The post-COVID-19 consumption recovery has been slow and authorities have not taken sufficient anti-economic measures to support the economy. I am suffering from.”
Thielen believes continued pressure on the renminbi and the “absence of growth” for domestic companies could prompt investors to explore opportunities outside China.
However, given the country’s strict capital controls, cryptocurrencies could become one of the few channels available, he said, arguing:
“Cryptocurrency may be one of the only viable options.”
September 20 post BitMEX co-founder Arthur Hayes hinted at a similar possibility at X, suggesting that Chinese capital may already be flowing into gold and repaying USD offshore debt. He also shared his expectation that some of the capital will “end up” in Bitcoin.
No matter where Chinese capital goes, it will continue to grow in size.
I hope someone gets to Sir Satoshi. $BTC
— Arthur Hayes (@CryptoHayes) September 20, 2023
Indeed, such a narrative appears to have played out for Bitcoin in late 2016, with reports that Chinese investors were increasingly turning to Bitcoin to move capital out of the country.
At the time, trading volumes from China suggested there may be a link between the value of the Chinese yuan and the price of Bitcoin, with Bitcoin’s price eventually peaking around late 2017. Reached.
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However, Edward Engel, a crypto analyst at Singular Research, argues that times have changed and China’s capital flight may not have the same impact on Bitcoin today as it did then.
“This is not something I have heard,” Engel said in a statement to Cointelegraph. “The last time I heard anything like this was in 2017-2018 when junkets were using Bitcoin to support underground banks, but everyone knew about the Chinese Communist Party. “I’m here” [Chinese Communist Party] I just plugged that hole. ”
“China has gotten pretty smart about containing leaks, so I would be surprised if people were using old-fashioned methods.”
Junkets refer to organizations that helped wealthy Chinese gamblers move large sums of money overseas. Since then, China has cracked down on these companies.
However, Mr. Thielen has shown that Chinese capital is not responsible for the use of cryptocurrencies, such as using domestic electricity to mine cryptocurrencies, using over-the-counter traders to purchase Tether (USDT) via Tron, and sending cryptocurrencies internationally. He argues that there may still be ways to take advantage of it. faced with limitations.
The price of Bitcoin has been hovering between $25,000 and $27,000 since mid-August. According to Cointelegraph Markets Pro, it is currently trading at $26,621.
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