Yuan weakens, Bitcoin (BTC) has the potential to surge according to analysts in April 2025!

Jakarta, Pintu News – On Tuesday, the People’s Bank of China (PBOC) allowed the yuan (CNY) to weaken past the critical 7.2 limit against the US dollar, a move that may be a response to aggressive tariffs implemented by President Donald Trump.

This decision marks a change in the PBOC’s tightly guarded yuan exchange rate policy. The yuan, which is not a free-floating currency like the US dollar or euro, is only allowed to move within a 2% range of its set mid-rate on a daily basis.

Yuan Depreciation: Impact on Bitcoin (BTC)

Crypto analysts predict that the depreciation of the yuan could benefit Bitcoin , referring to a similar event that happened a decade ago. Early on Tuesday, the PBOC set the yuan’s daily mid-rate at 7.2038 per dollar, its weakest value since September. The move was interpreted as a signal from the PBOC to begin a managed devaluation of the yuan, aimed at maintaining the competitiveness of Chinese exports amid tariff pressure from the US.

Also Read: Bitcoin (BTC) is recovering, but big hurdles still loom in April 2025

Capital Flows into Bitcoin (BTC)?

This managed devaluation could also potentially trigger capital outflows from China, which may seek refuge in cryptocurrencies such as Bitcoin (BTC). Markus Thielen, founder of 10x Research, stated that the full economic pressure from the US might force China to respond with quantitative easing and currency devaluation.

If China allows capital outflows, Bitcoin (BTC) could surge, similar to what happened in 2015. That year, China’s central bank depreciated the yuan by 1.9% in one day, which was the largest daily depreciation in more than two decades.

Regulatory Barriers

While history shows that Bitcoin (BTC) tends to react positively to yuan depreciation, it is worth noting that over the years, China has become an anti-crypto nation.

New regulations announced this year require banks to monitor and report suspicious international transactions, including those involving crypto. Banks are required to investigate and report risky crypto trading, which can result in financial restrictions and potential blacklisting for traders.

Bitcoin (BTC) Prospects in the Shadow of Yuan

While there is upside potential for Bitcoin (BTC) as a result of the depreciation of the yuan, strict regulatory barriers in China could make it difficult for local traders to diversify into digital assets such as Bitcoin (BTC).

Since August 2024, the Supreme People’s Court has increased the legal risks for individuals using crypto in relation to money laundering, which could also apply to cases of capital flight. This has been a major deterrent, despite increasing economic uncertainty.

Also Read: First XRP ETF in the US Launched, Provides New Investment Opportunities!

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Trading crypto carries high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• Coindesk. Bitcoin Analysts Optimistic as China Surprisingly Fixes Yuan Beyond 7.2 Level. Accessed on April 8, 2025
• Featured Image: Generated by AI