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Bitmex’s Hayes: Fiat Instability Could Skyrocket Bitcoin

Bitmex’s Hayes: Fiat Instability Could Skyrocket Bitcoin

CoineditionCoinedition2024/08/15 16:00
By:Parth Dubey
  • BitMEX’s Arthur Hayes believes that fiat will implode, pushing Bitcoin up.
  • ATFX Global Markets reported a 30%-40% surge in yen shorts in the past week.
  • Most of the short positions were occupied by hedge funds and high net worth clients.

Arthur Hayes, the co-founder of the digital asset trading platform BitMEX, has predicted that the price of the world’s largest cryptocurrency by market capitalization, Bitcoin (BTC), will skyrocket if the fiat system implodes in the near future or “if more fiat liquidity chases assets with finite supplies.” 

Hayes shared his thoughts on social media platform X (formerly Twitter), to discuss the scenario where the Bank of Japan (BOJ) and the United States Federal Reserve would not allow the US dollar and Japanese yen interest rate differential to narrow. 

Hayes referenced a Bloomberg report by David Finnerty and Ruth Carson which discussed how the popular yen-centered carry trade that exploded two weeks ago leading to the collapse of global markets, is making its comeback. The authors highlighted how the yen has declined 5% against the dollar since August 5, which has resulted in a surge in the short positions on yen.

Japanese broker firm Nomura confirmed a surge in investors borrowing yen to invest in higher-yielding assets. This indicates that key players in carry trading, including corporate clients and hedge funds, are shifting to higher-yielding options.

Australian forex broker ATFX Global Markets reported a 30%-40% surge in yen shorts in the past week and the majority of the positions were opened by hedge funds and high net worth clients. BOJ Governor Kazuo Ueda is due to speak on August 23 before the parliament, providing further clarity on the situation.

 As per a Reuters report, Nathan Swami, Asia-Pacific head of foreign exchange trading at Citi in Singapore, said that the yen is currently more affected by US rates and the significant yield differential and not by the BOJ hiking policy rates in the short term. Swami believes that the BOJ will work towards normalizing the policy but what the Fed does in the meantime is crucial.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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