Hayes Sees Dollar Liquidity Boost as Key for Bitcoin Rally

Arthur Hayes, co-founder of BitMEX, believes that an expansion of Federal Reserve liquidity for Japan could support Bitcoin (BTC) and Ethereum (ETH). This potential move would come in the form of a larger Foreign and International Monetary Authorities repo facility (FIMA), which would allow Japan to borrow more dollars against its Treasury holdings without having to sell large amounts of U.S. Treasuries.

Hayes estimates that Japan holds $1.373 trillion in eligible Treasuries, with the Government Pension Investment Fund holding an additional $230 billion. He argues that a larger FIMA facility would increase dollar liquidity as Japan borrows against these Treasuries and sells the dollars to buy yen.

This increased liquidity could, in turn, favor Bitcoin, gold, and Ethereum, according to Hayes. However, any expansion of the FIMA facility is still dependent on action from the Federal Reserve. Hayes has been increasing his exposure to these assets while watching for potential rule changes.