Hayes: Fed Yen Intervention Could Boost Bitcoin Liquidity

Arthur Hayes, the BitMEX cofounder and head of the crypto investment firm Maelstrom, has outlined a macroeconomic thesis suggesting that a coordinated U.S.-Japan effort to strengthen the Japanese yen could significantly expand dollar liquidity and fuel rallies in Bitcoin, gold, and Ether. In an essay titled "Yenquake," Hayes argues that the most politically viable path for yen intervention involves the Federal Reserve's Foreign and International Monetary Authorities (FIMA) repurchase facility, a mechanism that would allow Japan to pledge its vast holdings of U.S. Treasury securities for dollars without selling them outright.

The core of the proposal centers on the FIMA Repo Facility, which currently allows foreign central banks to temporarily exchange U.S. Treasury holdings for dollars. The facility has a per-counterparty cap of $60 billion. U.S. Treasury Secretary Scott Bessent has publicly advocated for raising or eliminating this cap and expanding eligibility to include major Japanese financial entities, such as the Government Pension Investment Fund (GPIF). Japan's government holds approximately $1.143 trillion in U.S. Treasuries, and the GPIF holds another $230 billion,...