Crypto Expert Hayes Sounds the Alarm on Bitcoin!

As the easing of the Japan-related interest rate spread continues, the risks for BTC could increase, according to experts. While the largest crypto asset surged to $58,000 earlier in the week, that doesn’t inspire confidence. The fact that crypto wasn’t mentioned in the Trump-Harris debate and Trump is trailing in the polls has weighed on BTC prices.

A notable comment came from crypto expert Arthur Hayes amid all this. Speaking to his followers on the X platform, Hayes made the following statement:

“The USD/JPY (US dollar/Japanese yen) has dropped to 140 and is about to become a gin town again in the market. Let’s see if BTC can hold up?”

Investors engage in carry trades by borrowing in currencies with low or near-zero interest rates to acquire assets with higher yields. The Bank of Japan’s first rate hike in August sparked a carry trade and caused a crash in global markets. Hayes worries that the “crash” that occurred in August could be repeated.

“Expectations of a Fed rate cut and a Bank of Japan rate hike are strengthening the Japanese yen and forcing investors to unwind their carry trades,” said Yardeni Research.

If the Fed cuts rates by 50 basis points and shifts to quantitative easing, carry trades could continue, according to Yardeni.