Former BitMEX CEO Arthur Hayes stated that the weakening Japanese yen could lead to actions that could increase the price of Bitcoin and other cryptocurrencies. 📉💱 The rapid weakening of the Japanese yen against the US dollar due to the large interest rate difference between the two currencies weakens Japan's export competitiveness against China.

China may threaten to devalue the yuan if Japan does not strengthen the yen, as the weakening of the Japanese yen makes Japanese exports more competitive against Chinese exports. The United States could force Japan to strengthen its yen by engaging in unlimited dollar-yen currency swaps with the Federal Reserve's Bank of Japan.

These large Fed dollar swaps increase the global supply of dollars while allowing China to stimulate its economy without devaluing the yuan. This increases the prices of dollar-denominated assets, US stocks and cryptocurrencies such as BTC.

Hayes argued that this was an "easy button" solution to avoiding more painful actions, such as the Bank of Japan raising interest rates or the Fed explicitly implementing yield curve control. He also predicts that the yen's weakening pressure will peak around the US elections, spurring policymakers into action. This could potentially be very bullish for Bitcoin as a hedge against global liquidity growth.