Arthur Hayes: China's QE will take time, Bitcoin, let's go!

Bitcoin returned to the $70,000 mark last night, and BitMEX co-founder Arthur Hayes also released "Let's Go Bitcoin," discussing the current state of the Chinese economy and its impact on Bitcoin, as well as his optimistic outlook on the future of Bitcoin.

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Current Economic Situation in China

China is facing the issue of a bursting real estate bubble, leading to reduced economic activity and increased unemployment. As a result, the Chinese government has implemented the "three red lines" policy to restrict excessive borrowing by real estate developers, which has further exacerbated the market's challenges.

The Chinese government is currently utilizing quantitative easing (QE) and other monetary policy tools to stimulate the economy, including purchasing government bonds and injecting capital to support the banking system.

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Resurgence of China's P2P Market

Hayes believes that the Chinese are among the most resourceful people on the planet and they will not allow their precious savings in Chinese Yuan to sit idle while asset prices in Beijing are encouraged to inflate. Bitcoin is not a foreign concept to residents of medium to high-income coastal cities in China, and despite exchanges being banned from offering visible Bitcoin/Renminbi trading pairs, Bitcoin and cryptocurrencies continue to thrive in China.

Hayes has heard that the P2P market in China is once again active, with all major Asian spot exchanges like Binance, OKX, and Bybit doing business on the mainland. Local traders are assisting Chinese people in trading cryptocurrencies on exchange-operated P2P message boards.

Although Hayes is unable to display Bitcoin tracking products or related charts flowing into China due to data restrictions, he does know that the performance of stocks and real estate is lagging behind the growth of the central bank's balance sheet.

QE Takes Time, Bitcoin Gains Momentum

Hayes emphasizes that the quantitative easing by the People's Bank of China and the re-acceleration of bank credit growth will take time, and market expectations should not immediately drive up Bitcoin. However, in these initial stages, Chinese depositors are reacting as he anticipated, buying oversold domestic stocks and heavily discounted apartments.

Hayes believes that now is a good buying opportunity. When affluent coastal residents in China decide they must own Bitcoin at any price, the price surge will mirror that of August 2015, when Bitcoin rose from $135 to $600 in less than three months after the People's Bank of China significantly devalued the Renminbi, nearly quintupling in value.