BitMEX founder Arthur Hayes said bitcoin could break out of its “sideways funk” if the Federal Reserve steps in to support Japan’s government bond market with fresh liquidity.
Japan’s yen and bond stress
Hayes described a “dual crisis” in Japan, with a weakening yen alongside rising Japanese government bond (JGB) yields.
He said the move could pressure US markets if Japanese investors sell US Treasuries to rotate into higher-yielding JGBs.
Hayes said:
“This discussion of Japanese financial markets is important because for Bitcoin to exit its sideways funk, it needs a healthy dose of money printing.”
How Hayes thinks the Fed could intervene
Hayes outlined a potential mechanism where the Fed creates dollar reserves with large banks, sells dollars for yen to support the yen, then uses yen to buy JGBs to push yields lower.
He said this would expand the Fed’s balance sheet under “Foreign Currency Denominated Assets.”
He added:
“This Fed intervention is just what the filthy fiat system needs to limp along a little longer.”
Hayes said he is watching the Fed’s weekly H.4.1 balance sheet report for confirmation before increasing risk.
He also linked recent price action to the yen, saying bitcoin fell as the yen strengthened against the dollar.
DXY hits a four-year low
The US Dollar Index fell to 95.6 on Tuesday, its lowest level since January 2022, according to TradingView.
Hayes’ comments came as President Donald Trump said the dollar was “doing great,” while criticizing Japan and China for repeatedly devaluing their currencies.
