Fed Support for Yen Could Push Bitcoin Higher, Says Arthur Hayes

Highlights:

• Hayes suggests Fed printing dollars to buy yen could boost Bitcoin significantly.
• He predicts Bitcoin could reach $200,000 by March 2026 under liquidity support.
• In a bigger scenario, Bitcoin might hit $500,000 if global money flows increase.

Arthur Hayes, co-founder of BitMEX, shared a hypothesis suggesting Bitcoin may be set for a major rally in 2026. He said if the United States Federal Reserve prints dollars to support the Japanese yen, liquidity could flow into Bitcoin, boosting its price.

Hayes explained that the Fed could create banking reserves and then sell dollars to buy yen. “Very bullish if true for BTC. This assumes Fed prints dollar, creates banking reserves. dollars are then sold to buy yen,” he said. He added that if such a policy occurs, the Fed’s balance sheet would show growth via the Foreign currency denominated assets line item, released weekly in the H.4.1 report. According to Hayes, this expansion could directly benefit Bitcoin.

Yen Movement Signals Possible Intervention

Recent currency trends support Hayes’s theory. Bloomberg reported that the Japanese yen rose about 1.75 percent, reaching 155.63 per dollar. This marked its strongest level since December and followed gains during Asian trading hours.

Hayes highlighted that the New York Fed conducted dollar-to-yen checks to gauge market conditions. There has been no intervention so far, but the market saw this as an indication that the authorities are keeping a close eye on the performance of the yen. The Bank of Japan left interest rates unchanged last Friday, easing market tensions sparked by rumors of a possible increase in interest rates.

Bitcoin Price Outlook Remains Strong

Hayes has set bold targets for Bitcoin. He predicts the price could reach $200,000 by March 2026 if the Fed expands its balance sheet. In a more aggressive scenario, Bitcoin could climb to $500,000 by the end of the year if global money flows accelerate. Currently, Bitcoin trades near $89,400, showing little reaction to recent macroeconomic developments.

Gold and silver increased this week, while Bitcoin moved sideways. Analysts state that Bitcoin tends to follow gold with a time delay during large market changes. This indicates that metals could be a sign of future market movements in the crypto market. Swissblock Technologies labeled gold a “spoiler alert” for Bitcoin. When gold increases, it is usually a sign of a large Bitcoin price increase to come. In 2020-2021, this trend resulted in a 400% Bitcoin price increase.

Institutional selling has been a drag on Bitcoin’s price momentum. The Bitcoin ETF experienced a net outflow of $104 million yesterday, which is the fifth consecutive day of outflows. More than $1.4 billion has left the fund over the past week. This comes after the Bitcoin funds experienced their best week since the October crash.

Experts had forecasted a rally due to previous positive momentum, but institutional withdrawals have slowed short-term gains. Despite these challenges, Hayes maintains that macroeconomic support could override short-term institutional pressure. He argued that dollar liquidity and yen intervention would create favorable conditions for Bitcoin to surge.