New Predictions by Arthur Hayes: “US Secretly Printing Money, Pay Attention to the Cryptocurrency Market”
Former CEO and founder of the cryptocurrency exchange BitMEX, Arthur Hayes, has recently made intriguing predictions regarding the potential impact of US monetary policies on Japanese banks.
Hayes anticipates that Japanese banks will sell significant amounts of foreign bonds, particularly U.S. Treasury bills (UST). He speculates that the Bank of Japan will utilize the FED’s FIMA repo facility to manage this situation. According to Hayes, this move could potentially benefit Bitcoin and other cryptocurrencies by increasing the availability of dollar liquidity.
Hayes highlights the first banking crisis in the US financial system, which occurred in March 2023. The collapse of three major banks within a span of two weeks prompted the Fed to provide comprehensive support for all USTs held on the balance sheet of any U.S. bank or U.S. branch of a foreign bank. As expected, Bitcoin experienced an upturn in the months following the announcement of the bailout.
The increase in the FIMA repo facility indicates the injection of dollar liquidity into global money markets. Hayes believes that this development bodes well for Bitcoin and other cryptocurrencies. However, he cautions readers that this covert method of money creation has the potential to stimulate the crypto market.
Hayes recalls the period between September and October 2023, when the UST yield curve steepened. This led to a 20% decline in the S&P 500 and the trading of 10-year and 30-year USTs at yields surpassing 5%. In response, Janet Yellen shifted the majority of debt issuance to short-term T-bills in order to unload cash deposited in the Fed’s Reverse Repo Program. This action revitalized the markets, and starting from November 1, all risky assets, including cryptocurrencies, began to rise.
*Please note that this article does not provide investment advice.
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