Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are heading into a “money printing bonanza” as Japan unwinds its carry trade and the dollar weakens, according to BitMEX co-founder Arthur Hayes.

Why Hayes Thinks the Dollar Is About to Get Crushed

Hayes told The Rollup podcast on Monday that the real story behind crypto’s surge is not Fed Governor Christopher Waller‘s comments but Japan. 

The GPIF, Japan’s largest sovereign wealth fund, held an unscheduled meeting in August during a holiday month right after the G20, and dollar-yen dropped sharply in a single Asian trading session immediately after. 

Hayes read that as confirmation that a deal was struck at the G20 to repatriate Japanese capital, sell foreign assets, and buy yen.

Two forces are now driving dollar weakness simultaneously:

  • Japanese side: The U.S. is expanding the Fed’s repo facility to lend dollars to Japanese institutions so they do not have to sell Treasuries outright. They borrow dollars, sell them in the forex market, buy yen, and bring the money home.
  • European side: French banks make up 20% of the global repo market and hold large amounts of Japanese-owned French debt. If Japan sells that debt, French bank stress forces the ECB or France itself to increase the supply of euros to stabilize the system.

Both scenarios end the same way: the dollar weakens and hard assets like Bitcoin and gold rally.

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 never cleared its 2021 all-time high of $5,000, making the risk-reward setup hard to ignore. 

He also holds Zcash for its higher upside ceiling as a debasement asset, though he noted it can pull back hard. 

On Hyperliquid as measured by Hyperliquid Strategies Inc (NASDAQ:PURR), he argued it will go higher but sees Ethena as better risk-adjusted upside for the same amount of capital at risk.

His broader framework is a barbell: scarce hard assets like Bitcoin and Ethereum on one side “benefiting from money printing,” and revenue-generating on-chain businesses with strong buyback tokenomics on the other. 

He expects Bitcoin to potentially breach all-time highs by year-end but cautioned that political pressure ahead of November’s midterms may slow how fast prices can run.

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