Could Japan’s Banking Crisis Trigger Another Bitcoin Rally? Arthur Hayes Thinks So
Co-founder Arthur Hayes BitMEXHe recently suggested that Japan’s banking system is on the verge of a major crisis, potentially leading to a new surge. Bitcoin (BTC) and cryptocurrency markets. He argues that Japanese banks, burdened by large amounts of underwater U.S. government bonds, will soon need a significant bailout, similar to what U.S. banks faced in March 2023.
Arthur Hayes Predicts Bitcoin Surge Amid Japan Crisis
Arthur Hayes He warned that Japanese banks were dealing with serious financial problems due to large losses on US government bonds. He compared this situation to the crisis experienced by US banks last year. Silicon Valley Bank It announced losses of $1.8 billion on underwater bonds, prompting rapid intervention by the US Federal Reserve and the US Treasury. To prevent the collapse of the banking system, the Federal Reserve promised to completely stop holding U.S. Treasury securities in U.S. banks.
In a recent development, Norinchukin, Japan’s fifth largest bank, announced plans to sell $63 billion in the United States. european bonds By March 2025, paper losses on these bonds became unsustainable. Hayes believes this is only a small part of the problem, noting that Japanese banks collectively held $850 billion in foreign bonds at the start of 2022, of which about $450 billion were U.S. bonds, according to IMF research.
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Bond Selling Could Increase Bitcoin Prices
Arthur Hayes suggests a bond sale of this size would be unacceptable to the US Treasury Secretary Janet YellenIt would make it extremely expensive to fund the federal government because it would increase bond yields. He predicts that Yellen will request the Bank of Japan (BOJ) to buy these bonds from Japanese banks under her control. To facilitate this, Hayes proposes that the BOJ use the Foreign and International Monetary Authorities (FIMA) repo facility, allowing the BOJ to use U.S. Treasury securities as collateral against newly printed U.S. dollars.
According to Hayes, this will lead to more money being printed, which will be beneficial for those who hold assets such as Bitcoin. As a result, he plans to move from Ethereum stablecoins to “crypto exposure” and advised others to “buy the dip.” Arthur Hayes sees this as a key factor driving the current crypto bull market and suggests that the supply of dollars must increase to sustain the current dollar-based financial system.
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Maxwell is a crypto-economic analyst and Blockchain enthusiast who is passionate about helping people understand the potential of decentralized technology. I write extensively on topics like blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its effects on economic freedom and social well-being.
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