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Arthur Hayes, former BitMEX CEO and longtime macro thinker in crypto circles, believes a brewing financial storm in China could set the stage for a major Bitcoin rally.

In a string of posts on X (formerly Twitter), Hayes pointed to the escalating U.S.-China trade war and a potential devaluation of the Chinese yuan (CNY) as a familiar recipe for BTC price action.

“CNY deval = narrative that Chinese capital flight will flow into $BTC,” Hayes wrote. “It worked in 2013, 2015, and can work in 2025. Ignore China at your own peril.”

His warning comes as President Donald Trump doubles down on tariffs, threatening a 50% levy on all Chinese imports unless Beijing backs off its own retaliatory tariffs. In response, China’s Ministry of Commerce declared it will “fight to the end,” a move Reuters described as an intensifying “battle of wills” between the world’s two largest economies.

Arthur Hayes view on Chinese financial distress

Hayes, known for connecting macroeconomic events with Bitcoin price trends, has viewed Chinese financial distress as a signal for potential BTC inflows. In 2013 and 2015, yuan volatility and capital flight fears pushed many Chinese investors into Bitcoin. He sees 2025 shaping up similarly.

“$CNY deval is on like donkey kong!” Hayes posted , hinting at expected currency weakness amid mounting economic pressure on China.

He’s already begun positioning accordingly: “Been nibbling on $BTC all day, and shall continue,” he said, adding that while altcoins may soon become attractive, Bitcoin dominance is likely to surge to 70% in the short term. “Remember, money printing is the only answer they have.”

The yuan has remained relatively stable in recent months, but signs of stress are building. Trump’s tariff barrage could soon pressure the People’s Bank of China (PBOC) to intervene — possibly weakening the CNY to protect exports, just as it did in past cycles.

Tariffs threaten global supply chains

According to a Reuters report, if Trump’s 50% threat is enforced, total U.S. tariffs on Chinese goods could rise to 104% by midweek — crushing already-tight exporter margins. Chinese citizens and analysts alike are warning the trade war could escalate into an all-out decoupling between the two economies.

“Since China already faces a tariff rate in excess of 60%, it doesn’t matter if it goes up by 50% or 500%,” economist Xu Tianchen told Reuters. “There is no trade, so there is no harm.”

In retaliation, Beijing is preparing economic defenses. State-backed institutions are injecting liquidity, buying shares, and boosting efforts to stabilize domestic markets. Yet these may not be enough to prevent a wave of capital flight — especially if investors fear long-term damage to China’s export-driven recovery.

Why it matters for Bitcoin

For crypto watchers weakening yuan, monetary stimulus, and geopolitical fear create a prime environment for BTC demand — especially in Asia.

Hayes’s view is that Bitcoin remains one of the only truly borderless assets immune to both U.S. and Chinese capital controls. And if the yuan weakens again, history could repeat itself.