“Watch out for China,” Arthur Hayes, a cofounder of bitcoin and crypto derivatives pioneer BitMex who went on to set up the Maelstrom investment fund, wrote in a blog post, predicting a “final filthy fiat financial market convulsion before the globe, led by the U.S., can reflate and take bitcoin” beyond $1 million.

“Xi Jinping wants to keep the yuan stable against the dollar, whether for good or bad. If the dollar supply increases, he can instruct the People’s Bank of China to increase the yuan supply, ensuring the dollar-yuan exchange rate remains stable.”

This week, China’s central bank governor Pan Gongsheng confirmed the People’s Bank of China will cut interest rates and inject liquidity into the financial system through cuts to the amount banks are required to hold as reserves “at an appropriate time,” it was reported by Reuters.

China’s stimulus plans have been accelerated by Trump’s trade tariffs on the country which are threatening to escalate into a full-blown global trade war.

In November, China unveiled a $1.4 trillion debt package to ease local government financing strains and stabilize flagging economic growth amid pressure from the re-election of Donald Trump as U.S. president.

“In previous instances when China has ramped up monetary stimulus and injected excess liquidity into the system, in 2015 and in 2020, excess liquidity found its way into alternative assets,” a spokesperson for bitcoin and crypto platform Nexo told The Block. “Such stimulus could have broader implications for global markets, increasing appetite across equities and alternative assets.”

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Meanwhile, unconfirmed rumors and wild speculation are flying on social media that China could be planning to create its own bitcoin reserve—potentially beating the U.S. to an official bitcoin stockpile despite U.S. president Donald Trump confirming he wants to create a crypto reserve.

“China is now working double time to stand up their own strategic bitcoin reserve,” David Bailey, the chief executive of Bitcoin Magazine publisher BTC Inc and advisor to the Trump election campaign on bitcoin strategy, posted to X, adding: “They’ve been holding closed door meetings on the topic since the election,” without naming any sources.