TLDR: Bitcoin could benefit as Japan taps the Fed’s FIMA facility to defend a weakening yen. Japan and GPIF together hold roughly $1.37 trillion in Treasuries eligible as FIMA collateral. Hay
Arthur Hayes said a Fed-backed rescue of the yen through the FIMA repo facility could become the next major catalyst for Bitcoin, gold and Ether.
The BitMEX co-founder argued Japan is more likely to strengthen its currency by borrowing dollars against Treasury collateral than through aggressive rate hikes.
He said the resulting liquidity surge would favor monetary assets over speculative capital spending.
Hayes said the FIMA mechanism lets Japan avoid selling Treasuries outright while still generating dollars to buy yen.
The Ministry of Finance would repo its holdings at the Fed and receive a dollar loan. Those dollars would then be sold in forex markets to purchase yen directly.
He estimated Japan’s government holds about $1.143 trillion in Treasuries eligible for this process. GPIF adds another $230 billion, bringing the combined total near $1.373 trillion.
Arthur Hayes: Fed-Backed Yen Rescue Could Fuel Bitcoin, Gold and Ether
BitMEX co-founder Arthur Hayes said the most likely path to a stronger yen is not aggressive Bank of Japan rate hikes or large-scale Treasury sales, but Japan using the Federal Reserve’s FIMA repo facility to… pic.twitter.com/tT0XDjjflH
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Hayes compared this figure to the Fed’s roughly $4 trillion balance sheet expansion during the pandemic period.
Hayes pointed to a historical correlation between Fed balance sheet growth and Bitcoin’s price trajectory.
He said the FIMA facility’s $60 billion counterparty cap currently limits how much can flow through the program. Removing that cap would require action from the Fed’s Foreign Currency Subcommittee.
That subcommittee includes Fed Chair Warsh, along with Williams and Jefferson from the Board of Governors.
Hayes said its decisions require no public vote or published minutes. He argued this makes the policy shift easier to implement quickly once officials decide to move.
Hayes said gold’s recent rebound reflects investor preference for monetary assets over unproductive capital spending.
He argued markets are pricing in eventual dollar liquidity expansion tied to the yen intervention. Gold and dollar-yen moves may shift before any formal FIMA rule change is announced.
He noted Treasury Secretary Bessent has pushed publicly for raising the facility’s counterparty limits. Hayes said Bessent’s experience with currency markets makes his comments worth close attention.
The administration’s preference, according to Hayes, is for this liquidity to support AI infrastructure spending rather than crypto markets.
Hayes argued that outcome is unlikely given weak returns across major AI capital projects. He said Bitcoin’s price movement would instead reflect capital seeking better opportunities than unprofitable AI buildouts. This reasoning underpins his broader thesis linking the yen mechanism to digital asset prices.
Hayes said he has not reduced his firm’s dollar balances to minimal levels yet. He is waiting for confirmation that the Fed subcommittee has acted on the FIMA program. Both gold and yen positioning, he said, typically shift ahead of formal announcements.
Hayes named Ether as a large-cap asset that has not yet reclaimed its 2025 record high. He described this lag as a reason Ether stands out among major cryptocurrencies heading into a liquidity expansion. Ether’s role supporting tokenized real-world assets adds to this positioning, according to Hayes.
He also highlighted Ethena’s token, ENA, as a smaller-cap pick tied to the same liquidity thesis. Hayes said ENA’s circulating supply has fallen roughly 75% from its highs. The token price has dropped more than 90% over the same period.
Hayes attributed ENA’s decline to weak Bitcoin basis yields, which reduced returns on staked USDe.
He said a Bitcoin price increase driven by new liquidity could quickly revive that yield. Rising yields, he argued, would likely draw fresh capital back into Ethena’s synthetic dollar product.
Hayes concluded that both rate hikes and asset repatriation face political resistance from Tokyo and Washington.
He said the FIMA repo path remains the option both governments appear willing to pursue. Bitcoin, gold and Ether, in his view, stand to benefit most directly from that path.
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