Hayes says Fed money printing to support Japan could help Bitcoin breakout

BitMEX founder Arthur Hayes said the Federal Reserve printing money to support a failing Japanese bond market could allow Bitcoin to break out of its current “sideways funk,” according to Hayes. Hayes proposed the Fed “could be printing money to manipulate the yen and JGB [Japanese government bond] markets,” and warned Japan faces a dual crisis of a weakening yen and rising JGB yields that may signal a loss of market confidence.

He added that Japanese investors might sell US treasuries to buy higher-yielding JGBs, which would also affect the US. Hayes outlined a possible intervention mechanism in which the Fed creates dollar reserves with banks such as JPMorgan, sells dollars for yen to strengthen the yen, and then uses those yen to buy JGBs, lowering Japanese bond yields and expanding the Fed’s balance sheet under “Foreign Currency Denominated Assets.” He called the move “just what the filthy fiat system needs to limp along a little longer.” Hayes said he is watching the Fed’s balance sheet via the weekly H.4.1 report and will not increase risk until he confirms Fed printing to intervene in the yen and JGB markets.

The US dollar index (DXY) fell to 95.6 on Tuesday, its lowest since January 2022 according to TradingView, down about 10% over the past year; US President Donald Trump nonetheless said the dollar was "doing great," according to CNBC.