China’s Crypto Comeback: Is the Next Bull Run Already Loading?

0:00Hello and welcome to Coin Bureau's official podcast channel. My name is Guy and if you're seeking unbiased in-depth information about Bitcoin, cryptocurrencies, Web3, and all manner of related topics, then you've come to the right place. I hope you enjoy today's episode. While everyone in the crypto space obsesses over the Federal Reserve and Jerome Powell's next rate cut, something much bigger is brewing on the other side of the world. China, which famously banned Bitcoin mining and trading back in 2021, just quietly turned on the money printer. Reports are circulating of a massive liquidity injection, some claiming as high as $1.5 trillion worth aimed at jump-starting the Chinese economy, and history shows that when China prints crypto pumps. But is this stimulus actually real? Is China secretly buying Bitcoin and could the next bull run actually be made in China?

1:03Well, this is exactly what we're going to find out. My name is Guy and you're watching the Coin Bureau. But before we dive into the data, you need to know that I am not a financial advisor. Nothing in this video is financial or investment advice. This is purely for educational purposes to help you separate the fud from the facts. If that sounds reasonable, prove it by smashing that like button like a central banker smashing the print command, and let's get into it. So, if you've been on crypto Twitter recently, you've likely seen the headlines. China injects $1.5 trillion. China to buy one million Bitcoin. It sounds incredible and like the catalyst we've all been waiting for. But whenever numbers this big get thrown around, we have to pause and look at the actual data. So, let's start with that liquidity injection. The rumor mill claims China is injecting $1.5 trillion US dollars worth of liquidity into its economy. But here is where things get rather tricky. Other reports cite a figure of 1.05 trillion yuan. Now, for those of you

2:09who skipped math class at the current exchange rate, 1.05 trillion yuan is roughly $146 billion US dollars. That is a pretty massive difference. One is a market moving bazooka. The other is your box standard water pistol. So, which is it? Well, logically, you have to look at what the people's Bank of China or PBOC is actually doing. In late 2024 and early 2025, they announce cuts to the reserve requirement ratio or RRR. Basically, the amount of cash banks need to keep in their vaults. These cuts release about $1 trillion yuan or $140 billion of long-term liquidity each time. So, the $1.5 trillion headline you're seeing, that appears to be a conflation of multiple policy measures, potential stock market lending facilities, and pure hopium. It is not a single check being written to Chinese people. And then, there's the rumor about China buying 1 million Bitcoin.

3:15This claim surfaced just a few days ago, allegedly from Pantera Capital. But when we dug into the sources, we couldn't find a single verified report official statement or, indeed, any corroborating piece of evidence from major financial publications. Just a single report from a niche news outlet. From our perspective, until we see a wallet address or an official statement, this is nothing more than a hopium. But, just because the headlines are exaggerated, doesn't mean the thesis is wrong. Because while the retail floodgates might be closed, the institutional backdoor is being prized open. You may have heard talk about the Hong Kong ETFs as the gateway for Chinese capital. When the spot Bitcoin and Ethereum ETFs launched in Hong Kong in April 2024, the narrative was that mainland Chinese investors would pour billions in via the Stock Connect program. But then the ETFs launched and the volume was, frankly, underwhelming.

4:15Because the Stock Connect program does not currently allow mainlanders to buy crypto ETFs, they're explicitly blocked. So, game over for the China narrative then, right? Well, not so fast. Well, retail is blocked. There is a massive pool of capital that is quietly getting the green light. I'm talking about the insurance sector. The Hong Kong Insurance Authority is proposing new rules that would allow insurance companies to allocate capital into digital assets. We're talking about an industry with roughly $82 billion in gross premiums annually. Even a 1% allocation from this sector would dwarf the retail inflows we've seen so far. And here is the twist. Many of these insurers are subsidiaries of massive mainland Chinese conglomerates. So, this creates a legal regulated structure for mainland institutional capital to gain exposure to crypto assets without violating Beijing's

5:16capital controls. It's not a retail tsunami so much as an institutional iceberg. And now, let's talk about the charts. Most crypto investors are glued to the US federal funds rate, watching every word Jerome Powell says. But if you look at the historical data, Bitcoin's price actually has a much tighter correlation with something else entirely. The Chinese 10-year government bond yield. I know, bond yield sound about as exciting as watching paint dry, but stick with me. According to analysis from researchers like TechDev, local tops in the Chinese 10-year yield often align perfectly with Bitcoin impulse peaks. Why would this be? Well, it comes down to global liquidity. When China stimulates, they expand their money supply or M2. And research shows that Bitcoin has a 94% correlation with global liquidity over the long term. Currently, the US Fed is cutting rates. Yes, but China is in a unique position. Their economy is struggling

6:22with deflation and a real estate crisis. They have no choice but to keep liquidity loose. While the Fed is trying to stick to a soft landing, China is trying to prevent a crash landing. And historically, when the East turns on the liquidity taps, Bitcoin tends to float higher. In fact, the 30-day correlation between the PBOC's balance sheet expansion and Bitcoin currently sits at around 0.66. That is a statistically significant relationship. Simply put, you might be watching the wrong central bank. But liquidity isn't the only thing coming out of China. Remember the 2021 Bitcoin mining ban when China kicked out all the Bitcoin miners and the hash rate collapsed? Well, take a look at this. According to recent data, China has quietly climbed back to control roughly 14-20% of the global Bitcoin hash rate. But wait a minute, if mining is banned, how is this possible? Well, it turns out that banned in China often just means don't get caught.

7:29But there is a new narrative emerging that's even more interesting. Many of these mining operations are reportedly disguising themselves as AI compute centers. Or they're operating under the umbrella of state-owned enterprises looking to monetize excess energy from hydroelectric dams in places like Sichuan and Xinjiang. Think about it. China has massive overcapacity in energy infrastructure. Bitcoin mining is the most efficient buyer of last resort for that energy. So while the government publicly condemns crypto, privately it seems like they're happy to let state-linked entities capture the revenue. So this isn't a resurgence of retail miners. This looks like industrial grade state tolerated accumulation of hash rate. And speaking of accumulation, if you want to know what the smart money in Asia is doing, you have to look at the whales. And there is no whale quite as visible or controversial as just in Sun. Love him or

8:33hate him. The founder of Tron is often a proxy for Eastern capital flows and recently Sun has been positioning himself aggressively. He's invested heavily in projects linked to the US political landscape, bridging the gap between Asian capital and Western regulatory hopes. But beyond just one man, take a look at the exchange data. Trading volumes in the APAC region have surged 69% year over year. The Bitcoin exchange reserve ratio, which compares US-based exchanges to offshore exchanges, shows a clear flow of capital moving east. The coins are leaving Coinbase and heading to Binance, OKX and Buybit. This suggests that while American institutions are buying the ETFs, the actual liquid supply of Bitcoin is increasingly being cornered by Asian traders and entities. It's a massive transfer of wealth from West to East, happening right under our noses. Now, I know what you're thinking. Guy, this all sounds incredibly bullish. Should I

9:37remorgge my house? No, please don't. Because we have to look at the other side of the coin. The good news is that China's economic instability, specifically the collapse of their real estate market, creates a massive incentive for capital flight. Chinese citizens are sitting on a record 160 trillion yuan in household savings. With property prices falling and the stock market volatile, Bitcoin is the only asset that can truly get capital out of the system. This is the flight to safety thesis. But here's the bad news. If the Chinese economy deteriorates too fast, we could see a liquidity crunch. When people are broke, they sell their most liquid assets first. And crypto is liquid 24.7. Furthermore, the Chinese government is sitting on a massive pile of seized crypto estimated at nearly 200,000 BTC from the plus token seizure years ago. If they need to plug a budget hole, if they need to bail out a developer like Vanky or Country Garden, then they

10:43have a $12 billion piggy bank they can smash open at any time. And selling that into the market would not be nice for price action. So while the stimulus is bullish, the desperation that causes the stimulus is a double-edged sword. So to sum up, then, is the next bull run going to be made in China? Well, from our perspective, the answer is yes, but not in the way you might think. It won't be a flood of retail traders buying Dogecoin on WeChat like in 2017. That era is over. This cycle is about quiet, state-tolerated mining. Institutional capital flowing through Hong Kong insurance products and a desperate need to hedge against a falling real estate market. The liquidity is real. The correlation is real. And while the headlines about $1.5 trillion checks might be fake, the impact on Bitcoin's price is undeniable. Bitcoin is a global asset. And right now, the wind is blowing from the east. And that reminds me, if you're looking for

11:48the best exchanges to position yourself for this global liquidity wave, then you have to check out the Coinbira deals page. We've negotiated exclusive sign-up bonuses, trading fee discounts, and deposit cashbacks with the top exchanges in the industry. So just hit the link in the description or scan the QR code on screen. These deals won't last forever, so make sure you take advantage of them while you can. And folks, that's all from me for today. If you enjoyed this deep dive into the Chinese macro landscape, then make sure to punch that like button. And if you want to know more about how global liquidity actually works, you can check out our video on that right over here. Thank you for watching, and I'll see you again very soon. This is Guy, signing off. Hello, Guy again. Before you go, if you have a moment, please do rate and review us. It really helps the podcast grow and find new listeners. Okay, that's all for this episode. Thank you for listening, and see you again soon.