BTC Price May Rally if Fed Prints Money to Stabilize Japan, Says Arthur Hayes

The Bitcoin price has been stuck in a negative zone since last October’s crypto market crash. According to BitMEX co-founder Arthur Hayes, this negative trend could end if the US Federal Reserve helps stabilize Japan’s bond market.

Fed Money Printing Could Be the Catalyst BTC Needs: Arthur Hayes

In his latest essay, entitled “Woomph,” Arthur Hayes proposed a fresh theory, arguing that the Fed’s money printing to support Japan’s struggling bond market could be the best catalyst for a potential Bitcoin price surge. Hayes noted,

“Will a meltdown of the yen and JGB markets cause some sort of money printing by the BOJ [Bank of Japan] or the Fed? The answer is yes…This discussion of Japanese financial markets is important because for Bitcoin to exit its sideways funk, it needs a healthy dose of money printing.”

Why Japan’s Bond Crisis Matters for Bitcoin

Notably, this theory comes amid the Japanese financial market’s challenging conditions. As the yen continues to weaken and government bond yields climb, the financial market is under pressure, raising concerns. This crisis comes amid the country’s crypto-focused initiatives. As CoinGape reported yesterday, Japan will launch crypto ETFs by 2028.

Arthur Hayes added that the same could also reach the US if Japanese investors sell US Treasuries to invest in higher-yielding Japanese bonds. As a resolution for this concerning situation, Arthur Hayes believes that the Federal Reserve could step in. The central bank could create dollar reserves with major financial giants like JPMorgan.

To support yen, the bank could exchange dollars for the Japanese currency and then use them to buy Japanese government bonds. This could significantly push yields lower. It could also help increase the Fed’s balance sheet under foreign currency assets.

If the Federal Reserve prints money to support Japan, it would add more liquidity to the global financial system. Historically, such moves have often helped assets like Bitcoin, as investors look for better returns.  Also, printing money can reduce the value of fiat currencies like the dollar. This makes Bitcoin more attractive as a safe vehicle against inflation. Thus, Arthur Hayes believes that the Fed’s interference in Japan’s financial crisis could boost Bitcoin value.

Bitcoin Stuck in a Tight Range

Currently, the BTC price is stuck in a narrow range, struggling to surge past $100k. As of press time, BTC price is marked at $89,209, with a marginal 0.9% hike in a day. What is more concerning is the pioneer cryptocurrency’s failure to maintain momentum since last year’s market collapse.

Arthur Hayes believes that without a fresh round of money printing, Bitcoin may continue to move sideways. However, any confirmed intervention by the Federal Reserve or the Bank of Japan could act as the trigger that shifts market sentiment and fuels the next leg higher for the BTC price.