Former BitMEX CEO Arthur Hayes said he expects the Bitcoin price (BTC) to bottom out and quickly recover, while predicting that the US Federal Reserve will once again inject trillions of dollars into the financial system.
Hayes, a well-known figure in the crypto community, closely watches how the Japanese yen (JPY) and euro (EUR) perform against the US dollar. told.
According to Hayes, the continued strength of the dollar against these currencies could force the Fed to intervene and print money. This in turn affects the Bitcoin price as a result:
“You should watch these: JPY and EUR.
If JPY > 150 and or EUR < 0.90, wait for an 'intervention' to weaken USD.
‘Intervention’ means the Fed prints money.
Printing money means rising BTC.”
Additionally, Hayes explained his thesis in a blog post, highlighting how both Japan and the European Union are involved in yield curve control (YCC). According to Hayes, YCC is the act of buying government bonds with the aim of weakening the country’s fiat currency and expanding the money supply to reduce yields.
“Generally, Japan and the EU are happy to have a weak yen or euro against the rest of the world. It enables export industries to gain market share as their goods are cheaper than other countries.”
But Hayes thinks the situation is different, as rising inflation has made it harder for Japanese and EU citizens to meet their daily expenses.
“However, due to post-COVID food and fuel inflation and the cancellation of Russian commodity exports, citizens are currently facing the harsh downsides of having a weak currency. It is getting more and more expensive for them to eat, move around and heat/cool their housing.”
Hayes thinks that if America is determined to beat Russia with economic sanctions, it must find a way to weaken the dollar against the JPY and the EUR.
“At the direction of the US Treasury, the New York Federal Reserve Bank trading desk can print USD, buy JPY/EUR and buy Japanese Government Bonds (JGB) or EU member government bonds.”
Finally, Hayes says that if the US starts printing money again to support its allies, the surge in liquidity will eventually move towards the Bitcoin and crypto markets.
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.