On April 10, 2025, the Chinese yuan (CNY) hit its lowest level in 18 years against the US dollar (USD) amid escalating tensions in the ongoing trade war between the two global economic giants.
This significant milestone in China’s monetary policy has sparked renewed discussions about its implications for the cryptocurrency market—particularly Bitcoin (BTC).
CNY Devaluation Amid US-China Trade War
One must first consider the broader economic context to understand the CNY devaluation. China is under heavy pressure from a trade war with the United States, especially after the US imposed a sweeping 104% tariff on Chinese goods.
In retaliation, China introduced an 84% tariff on imports from the US. These measures have intensified economic friction between the two nations and placed the Chinese currency in a downward spiral.
USD/CNY rate. Source: TradingView
According to data from TradingView, the USD/CNY reference rate currently sits at 7.3412. Historical data shows that the yuan has fallen to its lowest point since 2007. This suggests that China may intentionally loosen monetary controls to support its export-driven economy as it grapples with slowing growth.
A Bullish Signal for Bitcoin and the Crypto Market
Arthur Hayes, co-founder of BitMEX, highlighted the potential link between the CNY devaluation and Bitcoin’s rise in a recent post on X (formerly Twitter). Hayes noted similar patterns in 2013 and 2015 when Chinese investors turned to Bitcoin as a haven. He predicts a repeat in 2025 as investors seek to shield their wealth from the falling yuan.
“CNY deval = narrative that Chinese capital flight will flow into $BTC,” Hayes remarked.
In 2013, during stringent financial controls in China, Bitcoin emerged as an attractive alternative asset.
“I think the Chinese really look to bitcoin as an excellent digital store of value, sort of like the new electronic version of gold.” said Bobby Lee, CEO of BTC China.
This tendency became even more pronounced due to China’s strict capital control measures. These measures limit individuals from transferring just $50,000 abroad annually. As the yuan depreciates, Chinese citizens see their domestic purchasing power decline, prompting them to seek alternative stores of value.
With its decentralized nature and independence from government control, Bitcoin has become an appealing option.
In 2017, when China tightened capital controls and banned domestic cryptocurrency exchanges, Forbes reported that Chinese investors flocked to Bitcoin to bypass these restrictions. This surge in demand pushed trading volume on platforms like Huobi (HTX) and OKX to record highs.
At one point, these Chinese exchanges accounted for more than 90% of global Bitcoin trading volume. However, as the CNY strengthened, Bitcoin prices fell.
In 2020, the weakening of the yuan again drew analysts’ attention. Chris Burniske, a well-known voice in the crypto space, predicted that a weaker yuan could drive Bitcoin prices higher—mirroring patterns observed in 2015 and 2016. He emphasized that if the CNY continues to fall against the USD, Bitcoin could enter another strong growth phase.
The yuan’s plunge to an 18-year low in 2025 could signal another bullish cycle for Bitcoin. First, strict capital controls remain, limiting Chinese investors’ ability to move wealth overseas. This restriction makes Bitcoin a viable option for capital preservation.
Second, historical patterns reinforce the view that a weakening CNY often coincides with Bitcoin’s upward momentum.
Finally, global market sentiment could shift as investors anticipate capital outflows from China entering Bitcoin, further fueling price gains. As the world watches China’s monetary decisions closely, Bitcoin stands poised to benefit as a hedge against devaluation and a global store of value in uncertain times.
