Bitcoin Set to Soar? Yuan Devaluation Rekindles 2015 Crypto Playbook

On Tuesday, China unexpectedly allowed the yuan to weaken beyond the 7.2 level, signaling a shift in its currency strategy. This action might promote Bitcoin adoption because investors search for alternative investments under financial uncertainty and capital relocation risks. Multiple analysts monitor the situation because Bitcoin price typically rise due to yuan devaluation.

Yuan Depreciation Prompts Renewed Focus on Bitcoin

The People’s Bank of China set the yuan exchange rate at 7.2038 per dollar on Tuesday, marking its most depreciated position since September. Due to the long-standing psychological importance of this exchange rate level, Beijing officials have demonstrated their active involvement in managing yuan devaluation. Changing exchange rate norms will offset the financial damage from U.S. tariff reimplementation.

Investors in the market predict that sustained devaluation pressures might trigger capital to drain out of China if these forces continue throughout the following weeks. Historical data supports that Chinese capital controls do not stop depreciation from driving increased Bitcoin interest. Expert analysts argue that Bitcoin could harvest assets from Chinese investors according to how currency manipulations in the past shaped these movements.

Bitcoin achieved nearly 60% growth after the Chinese central bank implemented a similar policy in late 2015, although markets first experienced turbulence. The experts studying crypto are now comparing current events to 2025 because tensions between China and the U.S. have resurfaced. The amount of buying presents the potential to boost Bitcoin’s momentum, although investor emotions and regulatory frameworks might determine the outcome.

Regulatory Environment May Limit Local BTC Demand

Local Bitcoin demands in China remain constrained by several new financial restrictions that target cryptocurrency usage. The recent banking regulation forces Chinese financial institutions to detect cryptocurrency deals that might be criminal while also keeping a close watch on cross-border monetary movements. Since early 2024, the new regulation has aimed to stop money laundering schemes and prevent illegal capital transfer.

The legal situation has become more dangerous because the Supreme People’s Court established tough penalties against crypto-related violations in August 2024. The authorities have intensified their ability to prosecute virtual currency users through increased power to punish individuals who move money between different jurisdictions. The introduced regulations create difficulties for the mass adoption of cryptocurrency even when economic conditions deteriorate.

The overall demand for Bitcoin from global investors will likely persist, although broader financial markets within China will continue to react to its economic stance. Due to uncertainty, Bitcoin may receive increased global investment capital when the yuan undergoes controlled devaluation. Bitcoin is an investment tool to defend against currency devaluation because investors favor it as a protection against decreasing fiat value during unstable macroeconomic situations.

Bitcoin Price Holds Strong Amid Heavy Exchange Outflows

Spot exchange data indicates that Bitcoin withdrawals persist while investors holding onto their holdings for the long term have accumulated since February 15. Bitcoin saw its second large outflow on April 8th, maintaining the ongoing accumulation patterns. Bitcoin spot exchanges have reported more than $300 million in net withdrawals during several days since the beginning of February.

Bitcoin has shown price stability, while traders have moved funds between $65,000 and $72,000 during the last few weeks. Bitcoin reached a steady value of $73,000 in mid-March and has remained at that level until its current position below that level. The consistent price stability alongside continuous withdrawals signals positive beliefs among holders and diminished short-term sentiment to sell.

Market analysts predict price gains in the sector because macroeconomic forces, including currency devaluation, are likely to endure. The Chinese currency devaluation could boost Bitcoin worldwide demand because investors interpret it as proof of deeper economic problems. Since capital transactions away from exchanges are rising, the amount of trading supply available on immediate exchanges keeps getting smaller.

Ethereum Shows Resilience but Lags Bitcoin Performance

Ethereum demonstrates similar blockchain behavior to Bitcoin, yet it continues trading at a lower level than its peak value of approximately $3,300. The price movement of Ethereum included significant growth during the first part of 2025, but Bitcoin has more recently produced superior performance. The price movement of Ethereum generates investor attention because of ongoing shifts in worldwide macroeconomic factors.

Exchange outflows for Ethereum have remained significantly lower than those experienced by Bitcoin, so ETH holders demonstrate higher trading activity. ETH remains supported by the general appreciation of crypto assets, which results from geopolitical uncertainties and declining Chinese yuan value. Ethereum retains its investment value through decentralized options appealing to a broad audience.

The rise of the Bitcoin exchange rate due to safe-haven demand will likely trigger Ethereum’s delayed upward price movement. The market believes ETH prices will break out if macroeconomic stressors increase. The digital market considers Ethereum a fundamental asset that positively responds to worldwide security concerns.

FAQs

Why did China allow the yuan to weaken past 7.2?

China likely moved to keep exports competitive and respond to rising U.S. tariffs.

How could this impact Bitcoin?

Yuan depreciation often leads to capital flight, historically boosting demand for Bitcoin.

Can Chinese investors still buy Bitcoin?

Strict regulations in China limit access to cryptocurrencies, but offshore and global demand may still rise.

Is Bitcoin showing strong fundamentals?

Yes, consistent outflows from exchanges suggest long-term investor confidence in Bitcoin’s price stability.

What is Ethereum’s recent price trend?

Ethereum has remained relatively stable at around $3,300, slightly lagging behind Bitcoin in performance.

Glossary of Key Terms

Yuan Fix: The daily reference rate set by the People’s Bank of China for the yuan’s value against the U.S. dollar.

Capital Flight: Large-scale exit of financial assets or capital from a nation due to economic or political instability.

Bitcoin (BTC): A decentralized digital currency used as a store of value and hedge against inflation or currency risk.

Ethereum (ETH): A blockchain platform with a native cryptocurrency used for decentralized applications and smart contracts.

Spot Exchange: A platform where cryptocurrencies are bought or sold for immediate settlement

Reference:

Coinglass

Coindesk