Arthur Hayes, the former CEO of BitMex, provided a fascinating research on X (formerly Twitter) that speculates on potential capital flight from China. His study focuses on the Chinese yuan’s (CNY) year-to-date loss of about 15% of value versus the U.S. dollar (USD), which raises the possibility that China may contemplate spending enormous sums of money to purchase Bitcoin and other assets as a hedge against economic risks.
According to Hayes, Orient Capital Research’s Andrew Collier, a specialist on China, advised him to look at the difference between China’s stated foreign reserves and its international net export revenues to determine possible capital flight. According to the figures, China’s foreign reserves have grown by $32.4 billion this year, while net exports to other countries have surged by $553.25 billion, leaving $520.85 billion unaccounted for.
https://x.com/CryptoHayes/status/1704331260108431594?s=20
The crypto entrepreneur then makes predictions on where this money would end up, such as China buying gold, paying off foreign debt held by its banks and businesses, or wealthy people shifting their riches outside. Hayes jokes that China is not, in fact, purchasing more US Treasury securities.
He also draws attention to the link between the CNY and the declining Japanese yen (JPY), arguing that the CNY has to fall in value to remain competitive with Japan. Hayes also suggests that the amount of money leaving China may increase in the future.
As a last bit of speculation, Hayes says, “I hope some finds its way to Lord Satoshi and BTC,” suggesting that some of these monies may end up in the world of cryptocurrencies, notably Bitcoin.
