Crypto veteran Arthur Hayes thinks upcoming Chinese monetary policy will boost the price of Bitcoin (BTC).

Hayes notes in a new analysis that BTC’s price “will soar” as long as fiat money is printed, regardless of who the recipient is.

“The rhetoric right now from financial analysts is that the announced Chinese stimulus measures are still not enough to right-size the economy. That is true, but tucked inside the recent announcements are clues that China, directed by President Xi, stands ready to inject the monetary chemo to cure their deflationary cancer. That means that Bitcoin will soar on a secular basis as China reflates its banking system and property sector. Given that the Chinese property bubble was the largest in human history, the amount of yuan credit created will rival the sum of dollars printed in the US in response to COVID in 2020–2021.”

The BitMEX founder notes, however, that such policies take time to implement and the market won’t instantly recognize the impact and increase the price of Bitcoin.

“It takes time for chemo to kill the patient. During these initial stages, Chinese savers are reacting as I would expect: by buying oversold domestic equities and heavily discounted flats. It isn’t obvious to the world yet that this is the policy Xi has decided to pursue. But give it time, and the effects will be undeniable.

The fact economists are bearish on the size and scale of the stimulus so far presents a great buying opportunity. Because when the average wealthy coastal living Zhou decides they must have Bitcoin at any yuan price, the upside price volatility will harken back to August 2015, when, after a shock yuan devaluation by the PBOC, Bitcoin went from $135 to $600 — an almost 5x pump in under 3 months.”

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Bitcoin doesn’t require a U.S. dollar crash to become a six-figure asset class, Bitwise CIO Matt Hougan opined on X.

Bitcoin (BTC) has often been hailed as a hedge against the dollar’s declining purchasing power and as a potential beneficiary of a massive fiat implosion.

Some proponents have suggested that Bitcoin needs a dollar collapse to reach $200,000 per BTC and beyond. However, Hougan argued that this assumption is incorrect for two main reasons: growing demand for store-of-value assets and persistent government spending.

According to the Bitwise executive, these factors reinforce investor conviction when they invest in Bitcoin. Hougan further argued that store-of-value markets have gained momentum due to “governments abusing their currencies.”

For instance, U.S. spending has accelerated in recent years, and the country’s debt has surpassed $35 trillion. Analysts estimate the national debt grows by about $1 trillion every 100 days at its current pace.

Additionally, Unlimited Funds CIO Bob Elliott cited data indicating that “developed world sovereign debt,” such as U.S. Treasuries, may no longer effectively serve as bailout mechanisms, potentially supporting a pro-Bitcoin outlook.

Hougan expects this pattern to continue, leading to more mature BTC markets, increased adoption, and higher prices for the leading cryptocurrency.

So, no, the dollar doesn’t need to collapse for bitcoin to hit $200k. All you need is Bitcoin to continue on its current path of maturing as an institutional asset. But it’s increasingly looking like both parts of the argument will come true. That’s why Bitcoin is surging toward all-time highs.

Matt Hougan, Bitwise CIO

Hougan’s remarks came on Oct. 29, as BTC rallied closer to its all-time high set in March. BTC rose 5% in the last 24 hours, reaching $72,756. While technical indicators pointed to a potential Bitcoin breakout, historical patterns warn of volatility as U.S. citizens prepare to vote in the upcoming presidential election.

Bitcoin is on the verge of a historic move as it pushes toward its all-time highs, surging above the $71,000 mark just yesterday. This breakout has ignited optimism among analysts, who expect further upside in the coming weeks as the US election draws near—a period historically marked by heightened volatility and market shifts.

Critical data from CryptoQuant indicates that Open Interest has reached $22.6 billion, with half of these positions held by bears. If Bitcoin continues to climb, this setup creates a high risk of short liquidations, potentially accelerating buying pressure as prices push above $71,000.

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As momentum builds, the next few days will determine whether BTC can sustain its uptrend or if a consolidation phase below the all-time high will continue. Investors are closely watching these price levels, as a confirmed breakout could signal new highs for Bitcoin. At the same time, a stall might suggest a need for additional consolidation before a larger move.

Bitcoin Bears In Serious Trouble

Bitcoin bears are now at high risk of forced liquidations as a significant level of short position liquidity hovers above the $71,000 threshold. According to top analyst and macro investor Axel Adler, this scenario could ignite a powerful rally if short positions start liquidating en masse. Creating momentum that propels BTC beyond its all-time highs. Adler shared a CryptoQuant chart on X, noting that Bitcoin Open Interest has surged to $22.6 billion, with half of these positions held by bears.

In his analysis, Adler emphasizes that the current market structure is poised for a major squeeze. “There’s no need to hesitate in liquidating short positions to drive the price up,” Adler states, suggesting that a cascade of liquidations above $71,000 could act as a launchpad for Bitcoin, taking it into uncharted price discovery levels. This process, known as a “short squeeze,” occurs when overleveraged short holders are forced to close their positions, resulting in large buy orders that send prices even higher.

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If this scenario unfolds, Bitcoin wouldn’t be the only one benefiting. As BTC leads the market, a rally past previous highs could signal a fresh cycle for the entire crypto space. Altcoins typically follow Bitcoin’s lead, and the spillover effect could fuel a comprehensive bull run, with new highs across multiple assets. 

Investors are watching closely, as such a move could renew interest and investment in the crypto market, drawing in retail and institutional capital. With BTC on the edge of price discovery, the next few days may prove pivotal in shaping the market’s direction.

BTC Testing Cruial Supply 

Bitcoin is testing a supply zone at $71,200, brushing up against the last resistance level before reaching its all-time high. Bulls appear firmly in control, with price action signaling a likely breakout above this level in the coming days. Breaking and holding above the $70,000 mark remains critical. This psychologically significant level reinforces bullish sentiment, encouraging more buyers to enter the market.

However, a temporary retracement to gather liquidity at lower demand levels would benefit Bitcoin’s uptrend. A dip toward the $69,000 level, or even down to $66,500, would still align with a bullish outlook. It could attract further interest and create a healthier base for the next rally. These areas would allow Bitcoin to gather liquidity before making a stronger push toward new highs.

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Traders are watching, knowing that a sustained move above $71,200 could pave the way for price discovery beyond all-time highs. A successful breakout could trigger renewed momentum across the market, sparking a broader bull run as Bitcoin leads the charge.

Featured image from Dall-E, chart from TradingView