While the crypto world watches Wall Street and Washington, a surprising new player may be getting ready to start the next Bitcoin breakout: Tokyo. Arthur Hayes, a cofounder of BitMEX and an experienced macro strategist, says that Japan’s central bank could soon start a global crypto ripple effect that makes past bull runs look small.
Japan’s Liquidity Tsunami is Coming
Hayes wrote an essay called “Double Happiness” in which he says that the Bank of Japan is quietly getting ready to flood global markets with yen in a liquidity event that could be as big as the money printing during the pandemic. Why? In April, the Japanese Ministry of Finance made a small change to its policy that allowed the BOJ to use its foreign exchange reserves to buy domestic bonds.
On the surface, this may appear to be a typical financial maneuver, but Hayes argues that it’s not. Here’s the twist: the yen will get stronger if the BOJ sells its dollar reserves to buy Japanese Government Bonds (JGBs). Such an action could hurt Japan’s export economy. The bank would have to print more yen to rebalance, which would add more money to global markets at a time when the US Federal Reserve is tightening.
Hayes asserts that this disparity will act as a catalyst for risky assets, such as Bitcoin. Despite rising interest rates and uncertain economies in the US and Europe, Japan could quietly drive up cryptocurrency prices globally.
What Bitcoin Bulls Should Know
Hayes thinks that this return of liquidity from Japan will happen at the same time as Bitcoin’s next big move, especially since money is leaving dollar-based assets in search of growth. He even thinks that Japan’s actions could “sneakily” bring crypto markets back to life without the mainstream media noticing it until it’s too late.
Hayes has made bold calls in the past, but the current market setup is what makes this thesis captivating:
- The Fed is still stuck in a cycle of fighting inflation with little room to print.
- The European Central Bank is also not prepared to implement easing measures.
- Japan may act as a monetary counterweight, just like it did during the global crises of 2008 and 2020.
Hayes says that traders who see this uneven liquidity situation early on could make a lot of money. He also says that Bitcoin is in a unique position to handle this wave because it is accessible to everyone around the world, and its story is that it is immune to inflation. To put it succinctly, Wall Street finds itself in a state of uncertainty, while Tokyo appears to be preparing to transition.
Hayes’s essay has sparked a bigger discussion about global macro trends. Some analysts agree with him that Japan is entering a new era of stimulus that could surprise traditional markets. However, some analysts remain uncertain because changes in Japanese monetary policy typically occur gradually. But for people who own crypto, even a small change could be enough.
This theory also fits with the idea that Bitcoin is a way to get away from the volatility of fiat. If Japan starts printing a lot of money, Bitcoin could be a hedge again, not just against the dollar but against all currency instability.
As the crypto world anticipates halving cycles, ETF flows, and legal changes, Tokyo may emerge as a significant player. If Arthur Hayes is right, Japan’s financial shift could start the most surprising Bitcoin bull run yet.
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