Former BitMEX CEO Arthur Hayes believes that the weakening Japanese yen could have significant implications for the price of bitcoin and other cryptocurrencies. He argues that the yen is weakening against the US dollar due to a large interest rate differential, which could impact Japan’s export competitiveness against China.
If Japan doesn’t strengthen the yen, China may threaten to devalue the yuan to make their exports more competitive. To prevent this, Hayes suggests that the US could pressure Japan to strengthen the yen by engaging in unlimited dollar-yen currency swaps with the Bank of Japan. This would increase the supply of dollars globally, weakening the dollar and allowing China to stimulate its economy without devaluing the yuan. As a result, dollar-denominated assets like US stocks and cryptocurrencies could see their prices increase.
Hayes believes that these currency swaps provide an easy solution to the problem, avoiding more drastic actions like raising interest rates or enacting yield curve control. He predicts that the yen pressures will intensify around the US election, prompting policymakers to take action. This scenario could be bullish for bitcoin as a hedge against rising global liquidity.
Bitcoin has seen significant growth this year, driven by ETF speculation and demand. It reached $72,000 recently on hopes of the US SEC approving Ethereum ETFs. Some experts believe that the real rally for bitcoin will begin once major countries like the US start reducing interest rates
