- Global markets continue their downward spiral with the S&P 500 dropping 10% in five days as President Trump escalates trade tensions by imposing 104% tariffs on China despite warnings from Wall Street heavyweights.
- BitMEX founder Arthur Hayes suggests China’s potential yuan devaluation in response to US tariffs could trigger a crypto bull run, citing similar patterns from 2013 and 2015 when Chinese investors fled to cryptocurrencies.
- Bitwise CIO Matt Hougan focuses on the certainty that the Trump administration wants a significantly weaker dollar, which historically correlates with stronger Bitcoin performance.
- Despite current market turbulence, Bitwise maintains its ambitious US$200k Bitcoin price target for 2025, predicting that doubts about dollar dominance could elevate Bitcoin as a key alternative in global finance.
Markets are continuing a roller-coaster ride. Initially, it looked like markets would recover, but major indices, including cryptocurrencies, have since taken further hits as Trump continues to ignore warnings of an impending recession.
Related: Battle Lines Drawn: China vs. Trump Tariffs While Stagflation Fears Rattle Crypto Markets
The Standard and Poor’s 500 (S&P 500) for example is down more than 10% over the past five days, making the current crash one of the worst in recent times.
Several Wall Street heavy weights have warned against a tit-for-tat trade war and called for an end to escalating tariffs. True to form, Trump countered, saying he wasn’t going to be told by Wall Street what to do.
He then continued with his game plan and slapped a 104% tariff on China for not bending the knee to his demands. China itself has promised to “fight until the end”, leaving investors fearing for the future.
Yuan Devaluation Will Rekindle Crypto Bullrun, Says Hayes
BitMEX founder Arthur Hayes believes it’s a-okay though, suggesting that the US Fed and People’s Bank of China would provide what he calls “Yahtzee ingredients”.
In a post on Crypto Twitter, Hayes suggested that if China responds to US trade tariffs by devaluing its currency (the yuan), this could potentially lead to an increase in investment in Bitcoin and other cryptocurrencies.
He believes that if the value of the yuan decreases, people in China might try to preserve their wealth by converting their money into cryptocurrencies, which they perceive as more stable or potentially more profitable.
He also points out that this has happened in the past during similar situations in 2013 and 2015, and he thinks it could happen again.
Related: Ripple: Tokenised Financial Instruments Market Projected to Reach $18.9 Trillion by 2033
So, the “Yahtzee ingredients” are a combination of factors needed to kickstart another bull run in the crypto market. In this context, a significant devaluation of the yuan could be one such catalyst.
Bitwise Still Firmly Eyes US$200k Bitcoin Target for 2025
While we need to wait and see how Hayes’ predictions turn out, Bitwise Chief Investment Officer Matt Hougan offers a different view: He says that in times like these when every expert has a different opinion (tariffs are great, bad, and all the things in between), he tries to focus on what he is “confident will happen” rather than on wild speculation.
Hougan is sure:
The Trump administration wants a significantly weaker dollar, even if it means sacrificing the dollar’s role as the world’s sole reserve currency.
Matt Hougan, Bitwise Chief Investment OfficerAccording to Hougan, in the short term, a weaker US dollar will boost Bitcoin’s value, as historical trends show a negative correlation between them. In the long term, doubts about the dollar’s dominance could lead to a diversified reserve system, elevating Bitcoin and gold as key alternatives in global finance.
Which means, Bitwise still sticks to its guns when it comes to an end-of-2025 BTC target:
In December, Bitwise predicted that bitcoin would end the year at $200,000. I still think that’s in play.
Matt Hougan, Bitwise Chief Investment OfficerRead also: Australia Cracks Down on Crypto Scams, Winds Up 95 Companies
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