Fed and Bank of Japan Will Boost Bitcoin to $1 Million
BitMEX co-founder Arthur Hayes predicted: The Federal Reserve and the Bank of Japan (BOJ) will influence the Bitcoin price to surge to $1 million.
This forecast depends on the situation of these central banks. Potential steps to resolve Japan’s currency problems.
In an essay published on May 20, Hayes emphasized: The important role of the dollar-yen exchange rate It describes it as “the most important global economic variable.” He claims: Fluctuations in these exchange rates can cause central banks to dramatically expand the global money supply.
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Hayes explains that the situation has a lot to do with China, which is suffering losses due to the devaluation of the yen.. Compared to the strength of the yuan, the weakness of the yen could harm China’s export competitiveness. If the yen continues to weaken, China Respond by devaluing the yuan To maintain an edge in the global market
Japan, a major competitor in automobile exports, benefits from the depreciation of the yen. The goal is to make products more affordable in international markets. This scenario puts pressure on China, leading Hayes to believe: China may pressure the United States to intervene and strengthen the yen.
But Hayes notes the situation facing the BOJ. Difficulties in using traditional methods; Interest rate hikes to strengthen the yen, etc.
If the BOJ raises interest rates, it will collapse faster than Sam Bankman-Fried on the witness stand.
Interest rate increase is possible devaluation of Japanese government bonds; Of these, BOJ owns 50%. This situation would cause local banks and pension funds to buy government debt and sell U.S. Treasury bonds and stocks, putting them in conflict with U.S. interests.
Instead of raising interest rates, Hayes suggested the BOJ would raise rates. The “easy button” – an unlimited US dollar swap line with the Federal Reserve. This mechanism allows the BOJ to exchange yen for dollars at a set exchange rate and print more yen at virtually no cost. The BOJ can then use these dollars to buy yen, strengthening its currency and weakening the dollar.
Hayes argues that such a monetary policy characterized by widespread money printing would: It generally increases the price of Bitcoin and other assets.
Doing something about the weakening yen will mathematically estimate how the influx of funds into the Bitcoin complex would push the price above $1 million.
Overall, central bank action to address currency problems like those predicted by Hayes could lead to a significant rise in the price of Bitcoin.
Speaking of which, Bitcoin recently surged back above $71,000 and is currently trading at $69,896.34.
With a master’s degree in Economics, Politics, and Culture in East Asia, Aaron wrote a scientific thesis analyzing the differences between Western capitalism and collective capitalism after World War II.
With nearly 10 years of experience in the fintech industry, Aaron understands all of the biggest issues and challenges cryptocurrency enthusiasts face. He is a passionate analyst who delivers data-driven and fact-based content as well as speaking to both Web3 natives and industry newcomers.
Aaron is our go-to guy for all things digital currency. With a huge passion for blockchain and Web3 education, Aaron is working to transform the space as we know it and make it more accessible to complete beginners.
Aaron has been quoted in several popular media outlets and is a published author himself. In his spare time, he enjoys researching market trends and looking for the next supernova.
