If China responds to the comprehensive tariff pressure from the United States by devaluing the yuan, there is a high possibility that capital will flow into the cryptocurrency market, including Bitcoin (BTC).
On the 8th, Arthur Hayes, co-founder of BitMEX, posted on his X (former Twitter), "If not the Fed, then the People's Bank of China (PBOC) will eventually provide the spark for a cryptocurrency bull market," focusing on the upcoming capital flow. He predicted that if the Chinese central bank devalues the yuan, Bitcoin would again be chosen as a safe haven for Chinese capital. In fact, such a trend was repeated in 2013 and 2015, and analysis suggests it could be reproduced in 2025.
Ben Zhou, CEO of Bybit, also stated, "The Chinese government may intentionally lower the value of the yuan as a tariff retaliation card" and "Whenever the yuan's value has fallen in the past, there has been a tendency for large amounts of Chinese funds to move to BTC".
In fact, Chinese authorities recorded the largest one-day drop in decades by devaluing the yuan by about 2% against the US dollar in August 2015. At that time, Bitcoin prices showed an upward trend, though there is still debate about the direct causal relationship. Similarly, when the yuan's value fell below the symbolic exchange rate of 7:1 in August 2019, Bitcoin rose by about 20% in a week. Some analysts noted Bitcoin's status as a means of capital flight and hedge asset for Chinese investors.
Asset management firm Grayscale evaluated in a report at the time that the weakness of the Chinese yuan was one of the main backgrounds for Bitcoin's rise. Considering past precedents, if China responds with yuan weakness this time, there is sufficient possibility that a bull market could start across the cryptocurrency market.
Particularly noteworthy is the behavior of wealthy Chinese people who have used cryptocurrencies as a means of asset protection. In the past, they have used Bitcoin to move their assets overseas while avoiding government capital controls and foreign exchange outflow regulations. Along with the erosion of trust in the central bank, analysts suggest that yuan depreciation could accelerate the transition to decentralized assets.
Meanwhile, on the 7th, President Trump officially intensified additional tariffs on China, raising the level of the trade war. In response, the Chinese Ministry of Commerce warned of a hard-line response, saying "We will fight to the end". They stated that "If the US expands tariff measures, China will also take decisive counterstrokes to protect its national interests", indicating an escalation of policy confrontation.
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