Japan-Driven Liquidity Rally Could Push Bitcoin to New High

Arthur Hayes, CEO of Flop Labs, believes that Japan's efforts to strengthen its yen could create a new source of liquidity for Bitcoin and potentially drive it to a new high by year-end. According to Hayes, Tokyo's push to shift money from foreign to domestic assets is improving the liquidity conditions necessary for a bull run.

Hayes 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%. He dismissed new Fed Chair Kevin Warsh as 'irrelevant', saying every chair eventually accommodates the spending voters authorize.

Hayes attributed the recent crypto bid to Japan rather than U.S. rate expectations and noted that the yen has climbed to a seven-month high, with the dollar slipping below 153 yen on Tuesday. He believes Bitcoin is the 'fastest horse' in this scenario but said his firm's larger position heading into the potential liquidity rally is Ethereum.