Bitcoin: Arthur Hayes warns as yen strengthens

1. Carry trade liquidation risk Background: Bitcoin (BTC) is at risk due to the continued liquidation of carry trades. Previously, Bitcoin rebounded to $58,000, but there was a pullback after the US presidential debate between Trump and Harris.

Reason: The sell-off in early August was related to the strengthening of the yen against the dollar, which caused the price of BTC to fall to $49,000. Carry trade liquidation affects the crypto market.

2. Arthur Hayes' warning risk: BitMEX founder Arthur Hayes warned that the sharp fluctuations in the dollar against the yen could cause market chaos again.

He mentioned, "With the dollar approaching 140 yen, the market will fall into chaos again. We will see if Bitcoin can maintain stability."

3. Carry trade mechanism Background: Carry trades usually involve borrowing low-interest currencies (such as the yen) to invest in high-return assets. After the Bank of Japan raised interest rates, the yen exchange rate rose, leading to the liquidation of carry trades, which in turn affected the cryptocurrency market.

4. Future Outlook Interest Rate Expectations: Yardeni Research pointed out that the Fed's rate cuts and the Bank of Japan's rate hike expectations pushed up the yen exchange rate, forcing traders to close carry trades.

Bitcoin Impact: Since Bitcoin's positive correlation with Nasdaq is stronger than gold, carry trade closing may have a greater impact on BTC.

5. US BTC ETF Dynamic Risk Appetite: Despite the carry trade risks, US BTC ETF investors have recently adopted a risk appetite strategy, with increased capital inflows, breaking the long-term outflow record.

Summary

The carry trade closing risk and the strengthening of the yen may put pressure on Bitcoin prices. Investors need to pay attention to market trends and changes in the yen exchange rate to assess the future trend of Bitcoin.

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