Arthur Hayes: The yen may depreciate faster in autumn, and the global legal currency will depreciate, which is good for BTC
At present, the crypto industry itself has not seen a grand ecological application, and it is driven more by macro factors in the traditional financial field. After the Bitcoin ETF and halving are implemented, the next biggest influencing factor will be the monetary policy of major central banks, mainly the Federal Reserve. Faced with the high debts of all countries: print money or not? How to print? How much to print? How do China, the United States, Japan, Europe and other countries play games?
Behind the trade war, there is still a financial war. In other words, the driving force for the sharp rise of crypto assets in the future still depends on the macro monetary policy. To put it bluntly, countries need to continue to open the printing press. Arthur Hayes, founder of BitMEX, recently wrote an article: Why does the weakness of the yen push BTC to $1 million? This article introduces the principle of the underlying game in more detail. The Federal Reserve has raised interest rates for more than a year, and the current interest rate is 5.5%, and the interest rate difference with the yen is about 5.4%. This arbitrage structure has led to a large amount of global funds pouring into the United States through the yen for arbitrage, providing the United States with a large amount of liquidity, thereby driving the rise of the US stock and crypto markets. But now the US dollar is about to enter a rate cut cycle, and the Japanese yen is also about to start raising interest rates. This arbitrage space is reduced, and funds have begun to sell the Japanese yen against the backdrop of the Japanese yen rate hike. If panic is formed, the Japanese yen will depreciate rapidly, and the Bank of Japan will need to sell US bonds to intervene in the depreciation of the Japanese yen.
If the Japanese yen-dollar arbitrage structure collapses due to careless handling, it will cause liquidity to dry up rapidly, which is the source of risk. The United States obviously does not want the Bank of Japan to sell US bonds, so the Federal Reserve has not cut interest rates. The world knows this risk, so Arthur Hayes believes that the United States can conduct currency swaps with Japan; or the Federal Reserve prints unlimited US dollars. But either measure will lead to an increase in money supply and a depreciation of the US dollar. The market knows that the current environment will not last long, and Arthur Hayes believes that the pace of yen depreciation will accelerate in the fall. This will force the United States, Japan, and China to take action. If the theory becomes a reality, then in the face of global fiat currency depreciation, Bitcoin is the best performing asset, and funds flowing into the Bitcoin complex will push the price to $1 million, or even higher.As the debts of major countries in the world have reached a huge amount, and there is no better solution except to continue printing money, the timing of the 2024 US election will attract worldwide attention for the global financial market and the crypto market.
