BitMEX founder Arthur Hayes previously warned everyone to closely monitor the trend of the US dollar against the Japanese yen. If the yen depreciates wildly to the 200 level, it will trigger a gambling game between China, the US, and Japan, ultimately leading to significant devaluation of fiat currencies, with Bitcoin potentially reaching $1 million.
Japan and interest rate differentials with other countries are starting to narrow. If the US dollar depreciates, go long on Bitcoin, then shitcoins! Hayes pointed out at the time that if the US-Japan interest rate differential continues, investors will continue to sell the yen, causing it to depreciate continuously. This will harm China’s export competitiveness, forcing the Renminbi to devalue as well. However, the Biden administration may not be able to tolerate Renminbi devaluation before the election, as this would lead to continued job losses in the US, causing him to lose the election.
However, the situation has changed now! In addition to China cutting reserve requirements early in the year to provide market liquidity, Arthur Hayes has also compiled a chart of policy interest rates for various central banks, including:
Central banks that have started cutting interest rates: Bank of Canada (purple line), European Central Bank (ECB) (yellow line)
Expected to follow with interest rate cuts: US (white line), Bank of England (red line)
Remaining at a low of 0.1%: Bank of Japan (green line)
Hayes believes that if the market believes that the interest rate differentials between the yen and the US dollar, euro, pound, and other fiat currencies will narrow over time, it will buy yen and sell everything else! In the face of global fiat currency devaluation, Bitcoin will be the best-performing asset. With the People’s Bank of China, Bank of Canada, and European Central Bank all cutting interest rates, the fireworks of June central banks have been ignited, allowing cryptocurrencies to break free from the summer doldrums in the Northern Hemisphere. Although this was not Hayes’s initial expected scenario (he originally expected it to start in August), the trend is clear. Central banks are starting a loose cycle. Go long on Bitcoin, then shitcoins! Arthur Hayes Bitcoin