Arthur Hayes: “Bitcoin bullish if yen intervention materialises… Fed may expand liquidity”

An analysis suggests that Bitcoin could strengthen as the Japanese yen surges and the possibility of FX-market intervention is raised. Arthur Hayes, co-founder of BitMEX, argued that the Federal Reserve’s provision of dollar liquidity could be supportive for Bitcoin.

On the 23rd (local time), Hayes shared Bloomberg’s report on the yen’s spike via X and said, “If true, it’s very bullish for Bitcoin (BTC).” He assumed a structure in which, during Japan’s FX intervention process, the Fed creates dollars to increase bank reserves, and those dollars are used to buy yen.

Hayes said, “If the Fed is managing the yen, you would see an increase in the foreign-currency-denominated assets line item on the Fed’s balance sheet,” adding that “this can be verified through the weekly H.4.1 report.” He argued that if dollar liquidity expands in the course of FX intervention, it could create a favorable environment for global risk assets.

Earlier, Bloomberg reported that the yen jumped about 1.6% in a single day amid speculation about possible market intervention by Japanese authorities, rising to 155.90 yen per US dollar. It marked the strongest level since last December, and some analyses suggested the move resembled periods when the Japanese government previously intervened directly in the FX market.

Hayes’ remarks are based on the logic that intervention by monetary authorities to defend the yen could lead to an expansion of global liquidity, with Bitcoin potentially becoming an indirect beneficiary asset in the process. Some in the market also say that whether the Fed’s balance sheet actually changes could become a key indicator for gauging Bitcoin’s path going forward.