Arthur Hayes: Bitcoin and Ethereum Headed for a "Money-Printing Feast"

BitMEX co-founder Arthur Hayes said that as Japan unwinds carry trades and the U.S. dollar weakens, Bitcoin and Ethereum are heading toward a "money-printing feast."

Why Hayes Believes the Dollar Is About to Take a Heavy Hit

Hayes said on The Rollup podcast Monday that the real reason behind the crypto surge is not Federal Reserve Governor Christopher Waller's remarks, but Japan.

Japan's largest sovereign wealth fund, GPIF, held an unscheduled meeting in August—a holiday month, and right after the G20—and subsequently the dollar-yen fell sharply in a single Asian trading session.

Hayes interprets this as an agreement reached at the G20 meeting, requiring Japan to repatriate capital, sell foreign assets, and buy yen.

Two forces are currently simultaneously driving the dollar weaker:

Japan side: The U.S. is expanding the Fed's repo facility, lending dollars to Japanese institutions so that they don't have to directly sell U.S. Treasuries. They borrow dollars, sell them on the forex market, buy yen, and bring the funds back home.

Europe side: French banks account for 20% of the global repo market and hold a large amount of French debt owned by Japan. If Japan sells off this debt, pressure on the French banking sector would force the ECB or France itself to increase euro supply to stabilize the system.

Both scenarios end the same way: A weaker dollar, and hard assets like Bitcoin and gold rise.

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What Hayes Is Buying and Why

Hayes added that Ethereum is his largest position, because it is "the most hated mega-cap coin in crypto," and has never broken above its 2021 all-time high of $5,000, making its risk-reward ratio hard to ignore.

He also holds Zcash, as it has higher upside as a debasement asset, though he noted the coin could also see a sharp pullback.

On Hyperliquid, measured via Hyperliquid Strategies Inc, he thinks its price will go higher, but believes that with the same risk capital, Ethena offers better risk-adjusted upside.

His broader framework is a barbell strategy: On one end are scarce hard assets like Bitcoin and Ethereum, "benefiting from money printing," and on the other end are income-generating on-chain businesses with strong buyback token economics.

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He expects Bitcoin could break its all-time high before year-end, but warned that political pressure ahead of the November midterm elections could slow the pace of price gains.