How China’s strengthening yuan could support bitcoin prices

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email How China’s strengthening yuan could support bitcoin prices The yuan has rise to its highest in over two months against the dollar. By Omkar Godbole , AI Boost | Edited by Oliver Knight Updated Dec 17, 2025, 11:24 a.m. Published Dec 17, 2025, 11:24 a.m. USD/CNY slides as yuan surges to two-month high. (TradingView) What to know : The strengthening Chinese yuan could create a more bullish environment for bitcoin by influencing global money flows. A stronger yuan allows China to implement economic stimulus, potentially benefiting cryptocurrencies amid global economic shifts. The yuan's rise may lead to a weaker dollar, which historically boosts demand for dollar-denominated assets like bitcoin. Bitcoin's BTC $ 86,825.66 price often dances to the tune of global money flows, and right now, a strengthening Chinese yuan (CNY) could be setting the stage for a more bullish backdrop for the cryptocurrency, according to one observer. The yuan traded at 7.043 per U.S. dollar early Wednesday, its strongest level since Oct. 8. It has strengthened about 1% this quarter and 4% from April’s low of 7.3504 per dollar. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . Historically, the yuan hasn't had much direct pull on BTC prices. Rumors have swirled for years that a weaker yuan pushes Chinese capital into crypto (and vice versa), but there's zero solid proof. However, swings in the yuan’s value can still affect bitcoin via macroeconomic channels and foreign-exchange markets, according to newsletter service LondonCryptoClub, whose founder said the ongoing strengthening of CNY could bode well for bitcoin's price. "When the yuan is strengthening, it provides the cover for China to step up stimulus and easing to address the deflationary spiral they’re battling," the founders of the newsletter service told CoinDesk. A strengthening currency makes imports cheaper, thereby putting downward pressure on domestic inflation. This, in turn, creates room for policymakers to provide economic stimulus. Coincidentally, calls for Chinese stimulus have increased alongside a stronger yuan, following a string of dismal retail sales and corporate investment data released early this week. This stimulus could compensate for the expected increase in borrowing costs in Japan and Australia and the prospects of slower rate cuts by the Fed, thereby supporting risk assets, including cryptocurrencies. Now, coming to the foreign exchange part. A relentless rally in the yuan may prompt the People's Bank of China to intervene by buying dollars against the yuan. These dollars don't just sit idle; they're recycled or sold against other currencies to maintain a stable currency mix in the reserve portfolio, which holds trillions in major currencies, including the dollar, euros, yen, and others. This recycling operation ends up dragging the dollar index lower. And as it's well known, a weaker dollar tends to boost demand for dollar-denominated assets like bitcoin and contribute to looser financial conditions (cheaper cash). "Smoothing operations to slow the strength means increasing the money supply as they effectively print CNY to buy dollars. Those dollars also get “recycled”, selling against other currencies to maintain stable FX weightings in their portfolio," founders said. "This feeds broad dollar weakness. Added together, it all feeds into an easier liquidity environment which should be bullish for bitcoin," they added. The coming weeks will show whether this backdrop can steady bitcoin’s slide and help the market find its footing again. Bitcoin News China Yuan AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Protocol Research: GoPlus Security By CoinDesk Research Nov 14, 2025 Commissioned by GoPlus What to know : As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. View Full Report More For You Bitcoin long term holder supply hits 8 month low, breaking historical cycle patterns By James Van Straten | Edited by Oliver Knight 13 minutes ago Repeated distribution waves from long-term holders highlight how this bitcoin cycle is breaking from historical norms. What to know : Bitcoin long-term holder supply has fallen to 14.34 million BTC, its lowest level since May, marking the third wave of long term holder selling this cycle after earlier distribution around ETF approvals and the move to $100,000 after President Trump's election win. Unlike prior bull markets that saw a single blow off distribution phase, this cycle is characterized by multiple LTH sell waves that have been absorbed by the market. 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