Arthur Hayes, the co-founder and former CEO of crypto exchange BitMEX, believes the next crypto market rally will be shaped by the Chinese trader. According to his opinion laid out in a blog post, the US Securities and Exchange Commission (SEC)’s current crackdown on crypto might be a negative trigger, leading to the crypto market “freaking out” and “cratering” even further.
However, Hayes states it is not the US but China that could hold the baton as crypto heads into the next bull market. He predicts the catalyst to watch out for will be the “return of the Chinese trader” amid the weakening of the Chinese yuan. Hayes suggests that the return of the Chinese crypto trader through the financial pipes of Hong Kong will reignite the market at the same time the US mass affluent are “effectively shut out”.
To explain how China leads the next bull rally, Hayes notes the current market setup is similar to the summer of 2015, when a “nuclear bear market” was sparked by the implosion of Mt. Gox. He believes something similar could happen in 2023, with the Chinese crypto trader returning to the market and the PBOC sparking a rally with a “shock” devaluation vs. the US dollar.
The entrepreneur highlights the weakening of the yuan and the focused approach to attracting crypto and blockchain in Hong Kong are going to be key factors. He says this trajectory best suits HODLers, as Hong Kong “will be the conduit through which Chinese capital is allowed to own crypto financial assets”.
The BitMEX co-founder believes the money printing spree in China will weaken the yuan and see massive inflows into crypto, leading to a potential rally. As such, Hayes advises against selling now amid concerns around the US regulatory environment, as “at some point, the selling will stop, and then we get the dreaded sideways”.
