BitMEX co-founder Arthur Hayes has made a bold prediction that the Federal Reserve and Bank of Japan (BOJ) will play a significant role in pushing Bitcoin’s price to $1 million. This forecast is based on the potential actions these central banks may take to address Japan’s currency challenges.
Hayes highlighted the importance of the dollar-yen exchange rate, calling it “the most important global economic variable.” He explained that fluctuations in this rate could prompt central banks to dramatically increase the global money supply.
The situation is closely linked to China, which could suffer from the devaluation of the yen. A weaker yen compared to a stronger yuan could negatively impact China’s export competitiveness. Hayes believes that if the yen continues to weaken, China may devalue the yuan to maintain its global market edge.
Japan, known for its automotive exports, benefits from a devalued yen as it makes its goods more competitive internationally. This dynamic puts pressure on China, potentially leading to a scenario where China urges the US to intervene and strengthen the yen.
Hayes pointed out the challenges the BOJ faces in using traditional methods like raising interest rates to strengthen the yen. Instead, he suggested that the BOJ could utilize an unlimited US dollar swap line with the Federal Reserve, allowing them to swap yen for dollars at a set rate and strengthen their currency without devaluing Japanese government bonds.
Hayes believes that such monetary policies, involving extensive money printing, typically lead to increased Bitcoin prices and other assets. He estimated that Bitcoin’s price could reach $1 million and beyond once actions are taken to address the weak yen.
Overall, the actions of central banks in addressing currency challenges, as predicted by Hayes, could result in significant price increases for Bitcoin. Currently, Bitcoin is trading at $69,896.34 after recently surpassing $71,000.
