Maelstrom founder Arthur Hayes says the Federal Reserve is about to print trillions of dollars to defend the Japanese yen, and Bitcoin is his top bet to capture that liquidity wave.
Why Hayes Says The Fed Has No Choice
Hayes laid out the argument in a Substack essay.
He writes that the yen has lost more than half its value since 2012 after the Bank of Japan printed money for a decade to suppress bond yields.
That worked for global asset markets but destroyed ordinary Japanese purchasing power, and both the U.S. and Japan now want the yen stronger.
According to Hayes, the two most obvious fixes both lead to disaster:
- Raising rates aggressively isn’t realistic for the BOJ, since it holds trillions of dollars in Japanese government bonds that would lose significant value if yields jumped.
- Selling US treasuries isn’t realistic for Japan either, since dumping those holdings would destabilize the American bond market that funds the U.S. government.
What The Preferred Option Actually Is
Hayes said Treasury Secretary Scott Bessent already telegraphed the plan.
Japan’s Ministry of Finance pledges its U.S. treasury holdings to the Fed as collateral through a program called FIMA, gets dollars back, and buys yen with them.
The Fed prints the dollars, the yen strengthens, and no treasuries hit the open market.
The catch is scale. FIMA caps loans at $60 billion per counterparty, which is why a recent joint U.S.-Japan intervention only lifted the yen 5% before fading.
