Arthur Hayes, former BitMEX CEO, has detected an interesting correlation. He anticipates that demand for Bitcoin will surge with the stimulus of the Chinese economy.
In his article titled Let’s Go Bitcoin, Hayes noted that China is dealing with the largest real estate bubble in history. Similar troubles previously triggered major crises in Japan (1989), the US (2008), and the European Union (2011).
China’s economy has fallen into a liquidity trap or balance sheet recession. To prevent growing deflation, it needs a fiscal bazooka, Hayes noted wryly.
The expert believes that China’s authorities are sure to take drastic measures to avoid negative consequences. Hayes defines this as “monetary chemotherapy,” which includes two components: recapitalizing the banking system with government funds and implementing a quantitative easing (QE) policy, which involves printing money for large-scale purchases of government debt.
Arthur Hayes underscores that China’s real estate bubble is the largest in human history. It might happen that the volume of yuan credit will rival the amount of dollars printed in the US in 2020–2021, the expert concludes.
