Stronger Yen Could Fuel Dollar Liquidity, Boosting Bitcoin
Arthur Hayes, co-founder of BitMEX and crypto macro investor, has argued that a stronger yen could lead to increased dollar liquidity in global markets, potentially boosting Bitcoin's price. In an essay published on his Substack, Hayes pointed out that the US-Japan currency intervention in August had already sent the dollar down to around 156 yen.
Hayes believes that the next step for Japan would be to use the Federal Reserve's FIMA repo facility to borrow dollars without selling its US Treasury holdings outright. This move, he claims, could have major implications for Bitcoin and other crypto assets.
The FIMA facility allows foreign central banks to temporarily exchange their US Treasury holdings for dollars without selling those bonds outright. Hayes estimates that Japan and the Government Pension Investment Fund together hold over $1.373 trillion in US Treasuries eligible as FIMA collateral.
Hayes links his thesis directly to Bitcoin, arguing that additional dollar liquidity would increase demand for financial assets, with Bitcoin among the assets most likely to benefit. He also highlighted Ethereum and Ethena (ENA) as potential beneficiaries of a stronger dollar liquidity.