Originally published on: October 29, 2024
China’s increasing national debt may just be the boost Bitcoin needs to solidify its status as a safe haven against monetary devaluation.
Reports suggest that China is contemplating approving over 10 trillion yuan, equivalent to $1.4 trillion, in debt as part of a fiscal stimulus plan that could expand with a potential Republican victory in the upcoming Presidential election, as per sources speaking to Reuters.
If given the green light, this massive debt could be raised over the next three years to assist local governments in managing debt risks, sparking interest in Bitcoin as a hedge against currency devaluation among traders in China, notes Arthur Hayes, the co-founder of BitMEX.
This news paves the way for what Hayes describes as a “great buying opportunity” for Bitcoin in a recent blog post.
Hayes’ optimism builds on historical data showing Bitcoin’s remarkable performance following significant increases in national debt and currency devaluations. Back in 2015, the digital asset surged over five times in value after the People’s Bank of China devalued the yuan three times, causing a 3% loss in its value.
With Bitcoin hitting over $70,000 for the first time since June, with support from the upcoming US elections in November, the stage is set for a potential all-time high breakout on the horizon.
According to experts, such as Aurelie Barthere, the principal research analyst at Nansen, Asian investors are playing a crucial role in driving this price momentum.
Looking ahead, analysts at Bitfinex predict a further rally for Bitcoin, possibly reaching $80,000 by the end of 2024, attributing this potential surge to the options market structure and the likelihood of a Republican win in the upcoming elections.
As the world eagerly awaits the outcome of the US Presidential election, many view a triumph for Trump on Nov. 5 as a positive sign for risk assets like Bitcoin. The correlation between Trump’s increasing odds and Bitcoin’s price surge suggests a bullish sentiment in the market.
While this article does not offer investment advice, every move in the investment and trading world carries risks. Therefore, it is crucial for readers to conduct their own due diligence before making any financial decisions.
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