According to BitMEX’s co-founder Arthur Hayes, Bitcoin and crypto markets will reach unprecedented heights due to the appalling condition of Japan’s banking system.
Hayes said that Japanese banks, just like the U. S. banks in the month of March 2023 will need a huge amount of bailing out as their balance sheets are loaded with U. S. government bonds.
He wrote:
“Y’all know what that means for Bitcoin and crypto… which is why I thought it necessary to alert readers about another avenue of stealth money printing,”
He noted that since the banking crisis of last year and the central bank bailout, the price of Bitcoin has risen by more than 200%.
It is difficult to find more similarities than now with last year, SVB’s $1. 8 billion loss on underwater bonds, which led to a bank run and an emergency bail-out by the Federal Reserve and the U. S. Treasury.
Japan’s fifth largest bank, Norinchukin, intends to sell $ 63 billion in U. S. and European bonds by March 2025 due to huge paper loss.
Hayes thinks the size of Japanese banks’ foreign bond holdings, including nearly $450 billion in U.S. bonds, is an area that U.S. Treasury Secretary Janet Yellen would struggle to handle.
“That cannot be allowed as yields would spike higher and make funding the federal government extremely expensive,” Hayes said. “She will insist that the BOJ buys these bonds from Japanese banks under its watch.”
Hayes posits that the Bank of Japan will use the FIMA repo facility and offer US Treasury securities to obtain freshly printed US dollar notes.
