Bitcoin, Ethereum Are Set for a 'Money Printing Bonanza,' Arthur Hayes Says

Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are heading into a “money printing bonanza” as Japan unwinds its carry trade and the dollar weakens, according to BitMEX co-founder Arthur Hayes.

Why Hayes Thinks the Dollar Is About to Get Crushed

Hayes told The Rollup podcast on Monday that the real story behind crypto’s surge is not Fed Governor Christopher Waller‘s comments but Japan. 

The GPIF, Japan’s largest sovereign wealth fund, held an unscheduled meeting in August during a holiday month right after the G20, and dollar-yen dropped sharply in a single Asian trading session immediately after. 

Hayes read that as confirmation that a deal was struck at the G20 to repatriate Japanese capital, sell foreign assets, and buy yen.

Two forces are now driving dollar weakness simultaneously:

• Japanese side: The U.S. is expanding the Fed’s repo facility to lend dollars to Japanese institutions so they do not have to sell Treasuries outright. They borrow dollars, sell them in the forex market, buy yen, and bring the money home.
• European side: French banks make up 20% of the global repo market and hold large amounts of Japanese-owned French debt. If Japan sells that debt, French bank stress forces the ECB or France itself to increase the supply of euros to stabilize the system.