Arthur Hayes wrote in his Crypto Trader Digest post “Woomph” that dislocation in Japan’s yen and long-end government bond market could push U.S. officials toward FX intervention that expands dollar liquidity, a setup he views as constructive for Bitcoin.
He described a sequence where the New York Fed creates bank reserves, a primary dealer swaps dollars for yen, and the Fed may invest that yen into assets such as Japanese government bonds, increasing its “Foreign Currency Denominated Assets.” Hayes flagged two near-term signposts: the New York Fed publicly “checked prices” with dealers, and the Bank of Japan held rates steady on Jan. 23. He argued Washington has incentives to keep Japanese investors anchored in U.S. Treasuries, noting Japan holds about $2.4 trillion of foreign debt assets, most of it in U.S. Treasuries.
Hayes said the next checkpoint is the Fed’s weekly H.4.1 release, where week-over-week changes in “Foreign Currency Denominated Assets” would validate the thesis. Until then, he said he is not increasing risk, but would add Bitcoin exposure and potentially re-enter Bitcoin proxies like Strategy (MSTR) and Metaplanet if balance sheet expansion becomes visible.
Source: Arthur Hayes, Crypto Trader Digest (Substack).
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