BTC May Break Out If Fed Steps In to Rescue Japan Bonds

He believes such support would likely involve printing more money, which often benefits Bitcoin.

Japan is facing two problems at once: its currency, the yen, is losing value, and bond yields are climbing.

Hayes pointed out that this could also affect the US, as Japanese investors might sell their US Treasurys to buy local bonds offering better returns.

Hayes said, “Will a meltdown of the yen and JGB markets cause some sort of money printing by the BOJ (Bank of Japan) or the Fed? The answer is yes”.

According to him, more money entering the system could give Bitcoin the push it needs. He added, “This discussion of Japanese financial markets is important because for Bitcoin to exit its sideways funk, it needs a healthy dose of money printing”.

Hayes describes a possible path for how the Fed might act. It could create new dollar reserves through big banks like JPMorgan, exchange those dollars for yen to support Japan’s currency, and then use the yen to buy Japanese government bonds.

Doing so would help lower bond yields and expand the Fed’s balance sheet under the section titled “Foreign Currency Denominated Assets”.

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