Former BitMEX CEO Arthur Hayes Chia a notable analysis on X, about China's Capital flows.
His analysis focuses on the Chinese Yuan (CNY) which has lost nearly 15% of its value against the US Dollar (USD) YTD, thereby raising the question of whether China can XEM Consider investing billions of dollars in Bitcoin and other assets as a way to hedge against economic fluctuations.
According to Hayes, he consulted China researcher Andrew Collier from Orient Capital Research, who proposed examining the gap between China's net export earnings and official foreign exchange reserves of this country to evaluate the outflow of foreign currency investment Capital .
The data revealed that while China's foreign exchange reserves have increased by $32.4 billion this year, net international exports have increased by $553.25 billion, a difference of about $520.85 billion.
The crypto entrepreneur then speculated that maybe some of this difference could have flowed into some asset. He said it is possible that China has bought gold and paid off USD debt held by banks and corporations abroad. He infers it is also possible that some of the money has found its way into the cryptocurrency sector, specifically Bitcoin:
“I hope that some funds will seek access to Lord Satoshi and BTC.”
Hayes pointed out that China certainly will not buy more US Treasury bonds.
He also emphasized that the relationship between the Japanese Yen (JPY) and CNY is weakening, suggesting that CNY must weaken to maintain competitiveness with Japan. Additionally, Hayes suggested that Chinese Capital outflows from the country will likely continue to increase.
China's investment in Bitcoin is still just a conspiracy theory because the country still has a rather tense attitude towards cryptocurrencies. However, some major Chinese cities have taken a friendlier stance, especially Hong Kong.
In May, the Shanghai High People's Court declared that Bitcoin qualifies as a virtual asset protected by Chinese law despite a ban on cryptocurrency trading in China.
Also Read: The Shanghai High People's Court has declared Bitcoin a virtual asset protected by Chinese law
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