Will there be a China Bull in Bitcoin? Recent Capital Flight Could Affect Cryptocurrencies. Here are the details

As China grapples with a financial collapse marked by a falling currency, plummeting stocks, and declining bond yields, some analysts believe that capital flight from the country could fuel the ongoing rally of Bitcoin (BTC).

Experts Say the Bitcoin Bull Run Could Be Supported by Market Turmoil in China

The Chinese Yuan (CNY) weakened to its lowest level since September 2023, falling to 3.22 per US dollar, extending its three-month losing streak.

Despite the People's Bank of China's (PBOC) stronger daily reference rates and tightened offshore liquidity interventions, the yuan continues to decline.

Chinese stocks are also struggling. The CSI 300, which is an indicator for mainland blue-chip stocks, hit its lowest level since September.

By the way, the ChiNEXT Index, which tracks small and medium-sized enterprises with high growth rates, has fallen by 8% since the beginning of the year.

In addition to investors' concerns, the yield on 10-year Chinese government bonds has dropped by a full percentage point to 1.6% from a year ago, reflecting increasing deflation fears.

In the midst of this economic turbulence, analysts see Bitcoin as a potential safe haven for capital fleeing China.

The founders of LondonCryptoClub stated in their announcement, "China is allowing the currency to fall and no longer seems to be aggressively defending it, which allows for a gradual devaluation."

This situation will accelerate capital outflows from China, and Bitcoin, especially given the country's strict capital controls, will be a clear target for some of these outflows.

Historical precedents support this view. In 2015, when the Chinese yuan devalued, Bitcoin experienced a significant price increase and shortly after, it surged by more than threefold.