Arthur Hayes, co-founder of BitMEX, claims that the Federal Reserve may soon print money to intervene in Japanese currency and bond markets, a development he believes would eventually push Bitcoin (BTC) prices higher but that prompted him to exit his leveraged positions in Strategy and Metaplanet until his theory proves correct.
What Happened: Fed Intervention Theory
In a blog post published Jan. 28 Hayes outlined a scenario in which the New York Fed would create dollars, convert them to yen through primary dealers like JP Morgan, and purchase Japanese government bonds (JGBs) to stabilize both the currency and bond yields.
He pointed to the Bank of Japan's decision on Jan. 23 to hold rates steady despite mounting pressure on the yen and JGB markets as evidence that Japanese authorities may have sought American assistance.
The former BitMEX chief noted that the New York Fed recently checked prices with Wall Street dealing desks, a move he interpreted as a deliberate signal of potential intervention.
He said he would monitor the Fed's weekly H.4.1 report, specifically the "Foreign Currency Denominated Assets" line item, for confirmation.
Hayes disclosed that he stopped himself out of long positions in Strategy, the Michael Saylor-led company formerly known as MicroStrategy, and Japan-based Metaplanet, both of which hold Bitcoin as a treasury reserve asset, before recent yen movements.
He will re-enter these leveraged Bitcoin proxy trades only if the Fed's balance sheet data supports his hypothesis.
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Why It Matters: Bitcoin and Liquidity
The thesis centers on a core relationship Hayes has tracked: Bitcoin tends to rise alongside Fed balance sheet expansion. If the Fed prints dollars to purchase yen and JGBs, it would increase dollar liquidity globally, which historically correlates with rising crypto prices.
Hayes wrote that Bitcoin "will pump alongside a growing Fed balance sheet" but cautioned traders expecting immediate results. His fund, Maelstrom, continues to add to its Zcash (ZEC) position and holds DeFi tokens including Ethena (ENA), Ether.fi (ETHFI), Pendle (PENDLE), and Lido (LDO), which he said the fund would add to if the intervention thesis proves accurate.
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