The People’s Bank of China Significantly Increases Liquidity Injection: Does This Help Propel Bitcoin’s Continued Rise?

According to Bloomberg reports

The People’s Bank of China announced today that it will inject 600 billion yuan through a one-year Medium-term Lending Facility (MLF) operation to maintain ample liquidity in the banking system. The report indicates that this will bring the net funds injected through MLF in April to 500 billion yuan, the largest scale since December 2023. Wang Qing, chief macro analyst at Golden Credit Rating, stated:

“This move signals a continued easing bias in monetary policy, showing that the central bank is actively responding to challenges in the trade environment, and ensuring that market liquidity remains ample against the backdrop of accelerated issuance of special government bonds.”

In the context of rising tariffs in the United States

Chinese investors have been calling for further monetary easing policies. This large injection of liquidity helps address the peak demand for funds around the May Day holiday, while also supporting the special government bond issuance plan that started this week.

BitMEX founder Arthur Hayes

This month, Arthur Hayes posted on social media, indicating that the People’s Bank of China may devalue the yuan in response to Trump’s renewed tariff policies, which would be a “key factor” for a bullish revival in Bitcoin. According to him, a devaluation of the Chinese currency could trigger a wave of capital inflow into the cryptocurrency market once again. Hayes noted that China has previously experienced capital outflows in 2013 and 2015 under similar circumstances, which drove up Bitcoin prices.

“If it’s not the Federal Reserve stepping in, it will be the Chinese central bank providing the spark we need. Yuan devaluation = the narrative of Chinese capital fleeing into Bitcoin replays. It worked in 2013 and 2015, and it could work again in 2025. Ignoring China will lead to dire consequences.”