Arthur Hayes, co-founder of BitMEX, has released a new essay titled “Yen-quake” in which he argues that coordinated U.S.-Japan efforts to strengthen the yen could unleash a dollar liquidity surge and propel Bitcoin higher. The analysis, shared on social media and detailed in the essay, outlines multiple mechanisms by which such a policy move could benefit risk assets, especially cryptocurrencies.
Hayes presents three possible scenarios: aggressive Bank of Japan rate hikes, Japanese institutions like the Government Pension Investment Fund (GPIF) selling overseas assets to buy yen, and—as the most likely—Japan’s Ministry of Finance using its vast holdings of U.S. Treasuries as collateral at the Federal Reserve’s FIMA repo facility. Under this third path, Japan would obtain dollars, sell them for yen, and in the process inject dollars into the global financial system, expanding dollar liquidity.
“If the U.S. Treasury expands the limits of the FIMA repo facility to accommodate Japan, the resulting liquidity bump would provide strong upside momentum for BTC and the broader crypto market,” Hayes contends. He believes increased liquidity historically supports risk assets, and Bitcoin stands to benefit as investors seek alternatives amid a weaker dollar.
The essay is speculative and not an official policy forecast, yet it highlights how intertwined global monetary policy and crypto markets have become. The yen has been under pressure against the dollar, and any intervention would mark a significant shift with wide-reaching implications.
