Arthur Hayes, co-founder of BitMEX and noted cryptocurrency macro investor, stated that recent US-Japan efforts to strengthen the Japanese yen may ultimately inject substantial dollar liquidity into global markets, potentially acting as a powerful catalyst for Bitcoin and other cryptocurrencies.
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AAPLUS-Japan joint intervention and the yen’s decline
In late July, the Japanese yen dropped below 163 against the US dollar, reaching its weakest level in approximately four decades. This currency slide increased import costs for Japanese consumers, compounding domestic economic pressures.
On August 1, officials from the US Treasury and Japan collaborated on a rare joint intervention, purchasing yen to support the currency. This marked the first such coordinated move in over ten years and brought the dollar-yen exchange rate back to approximately 156.
Hayes published his analysis titled “Yen-quake,” outlining how this intervention could trigger expanded US dollar liquidity, with significant implications for digital asset markets.
The FIMA facility and possible scenarios
Hayes identified three approaches to reinforce the yen: a significant rate hike from the Bank of Japan, asset sales by the country’s Government Pension Investment Fund (GPIF), and deploying the Federal Reserve’s FIMA (Foreign and International Monetary Authorities) repo facility.
The FIMA facility lets foreign central banks, such as the Bank of Japan, exchange their US Treasury assets for dollars on a short-term basis without selling those bonds. Hayes considered the first two options politically or economically untenable, seeing FIMA as the most realistic tool for the Japanese authorities.
Should Japan’s Ministry of Finance use US Treasuries as collateral with the Fed, the ministry would obtain dollar liquidity that could be converted into yen, supporting the currency. Hayes explained that this approach would expand the Federal Reserve’s balance sheet and avoid disruptions in the US Treasury bond market.
Hayes cited comments from Treasury Secretary Scott Bessent, who previously called for raising FIMA’s $60 billion cap per counterparty. Any cap increase would require approval from the Fed’s Foreign Currency Subcommittee under the Federal Open Market Committee (FOMC).
He estimated that Japan and the GPIF collectively hold $1.373 trillion in US Treasuries, which could be used as FIMA collateral.
Mini dictionary: FIMA facility – The Federal Reserve’s Foreign and International Monetary Authorities (FIMA) repo facility allows foreign central banks and international monetary authorities to temporarily exchange their US Treasury holdings for US dollars, providing liquidity without selling Treasury assets outright.
| Option | Political/Economic Cost | Plausibility |
|---|---|---|
| Bank of Japan rate hike | High | Low |
| GPIF asset sales | High | Low |
| Fed FIMA facility | Low | High |
Potential impact on Bitcoin and other crypto assets
Hayes directly linked the expansion of dollar liquidity through the FIMA facility to increased demand for risk assets such as Bitcoin. He argued that any move to boost dollar supply would most likely drive up digital asset prices.
He also named Ethereum as a strong contender, noting that ETH continues to serve as a core infrastructure layer for tokenizing real-world assets (RWAs). Despite not reaching a new all-time high in 2025, Hayes suggested Ethereum’s pivotal role within the ecosystem remains unchanged.
Among more speculative assets, Hayes highlighted Ethena (ENA), which is down over 90% from its previous peak. He suggested ENA has the potential for five- to ten-fold growth if new dollar liquidity lifts Bitcoin prices and increases yields on Ethena’s USDe stablecoin.
Hayes explained that an expanded FIMA facility can provide fresh dollar liquidity without forcing Japan to sell its US Treasury bonds, creating favorable conditions for Bitcoin and other digital assets to rally.
He concluded that if the Fed raises the FIMA cap in support of yen stabilization, the influx of dollars could spark renewed buying interest in Bitcoin and the broader cryptocurrency market.
