Arthur Hayes Sees A Japan-Driven Liquidity Rally Ahead — And Bitcoin As The ‘Fastest Horse

Hayes expects the Fed to accommodate fiscal spending. He argues that, regardless of who leads the central bank, political pressure to support the economy could eventually mean more liquidity.

• According to Arthur Hayes, Bitcoin could hit a new high by year-end, given the dollar weakens against the Japanese yen.
• Hayes believes Japan is the key catalyst. Tokyo’s push to shift money from foreign to domestic assets could improve the liquidity conditions necessary for a bull run.
• Hayes called Bitcoin the “fastest horse” but said his firm’s larger position heading into the potential liquidity rally is Ethereum.

Bitcoin (BTC) could be on track to break a year-end record, but Arthur Hayes says the bigger story is where the next wave of global liquidity comes from. He believes Japan’s efforts to strengthen the yen, along with potential U.S. monetary support, could push money into risk assets and make Bitcoin the “fastest horse” in the next rally. But the catch — that bullish outcome hinges on what Japan and the Fed actually do. Ethereum is his firm’s bigger position, Hayes said.

“I think we can maybe breach the all-time high by the end of the year,” Hayes said to The Rollup, published on Tuesday, while cautioning that U.S. politicians “still can’t give the game away too much before the midterm elections," with affordability topping voter concerns.