Bitcoin Sees New Year-End High Potential as Japan Strengthens Yen

Arthur Hayes, CEO of Flop Labs, believes Bitcoin could hit a new high by year-end if the dollar weakens against the Japanese yen. He attributes this potential gain to Japan's efforts to strengthen its currency and create liquidity for Bitcoin in the long run.

Hayes points out that Tokyo is pushing the Government Pension Investment Fund (GPIF) to cut foreign holdings and buy domestic assets, which has led to a seven-month high in the yen. The dollar has slipped below 153 yen on Tuesday. Hayes expects Japan's moves to strengthen its currency will create a new source of liquidity for Bitcoin.

Hayes also thinks that Ethereum is his firm's larger position going into the potential liquidity rally, calling it the 'most hated mega cap' coin and the worst-performing one of the cycle. He has smaller allocations to Ethena (ENA). Previously, Hayes called Ethereum his number one crypto pick.

Hayes attributes the recent crypto bid to Japan rather than to U.S. rate expectations. He expects the Federal Reserve to hold rates at its September 15-16 meeting rather than hike, with the target range at 3.50%-3.75%.