Japan's Carry Trade Unwinding Sets Stage for Crypto 'Money Printing Bonanza'

Arthur Hayes, co-founder of BitMEX, believes Bitcoin and Ethereum are headed for a 'money printing bonanza' due to Japan's unwinding of its carry trade and the weakening dollar. Hayes made this claim on The Rollup podcast, pointing out that the real story behind crypto's surge isn't Fed Governor Christopher Waller's comments but rather Japan's actions.

Hayes attributed the drop in dollar-yen to an unscheduled meeting by Japan's GPIF in August during a holiday month following the G20. He interpreted this as confirmation of a deal struck at the G20 to repatriate Japanese capital, sell foreign assets, and buy yen.

Hayes identified two forces driving dollar weakness: the U.S. expanding the Fed's repo facility to lend dollars to Japanese institutions, and French banks facing stress due to Japan selling its debt, leading to increased euro supply by the ECB or France itself.

In response to these trends, Hayes expects Bitcoin to potentially breach all-time highs by year-end but cautioned that political pressure ahead of November's midterms may slow price growth.