Fed’s Hidden Ledger: Bitcoin’s Moonrise (Click to Read)

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In a dim office where the radiator croaks like a tired actor and the coffee tastes of possibility, Arthur Hayes-once the mercurial head of BitMEX-takes the stage as though he were summonsing a demon from a brokered briefcase. The room hums with the familiar magic of numbers, and the men in suits pretend they are prophets while the clocks pretend they are innocent. Hayes speaks of a Fed that could unfold its balance sheet like a magician’s scarf, extending itself to cradle the yen and the fevered bonds of Japan.

He claims this secret money-printing would lift Bitcoin and the rest of the crypto chorus, as if every keystroke on a central bank keyboard could tug a bell on some distant moon. A chorus of sarcasm and swagger follows, as if the universe itself were a hedge fund waiting for the punchline.

Hayes, the Yen, and the Great Market Puppet Show

In a January 28 essay titled “Woomph,” Hayes argues that the Fed possesses the legal authority to meddle in foreign exchange and bond markets, supposedly soothing the economic torment in Japan that threatens U.S. Treasury stability. The implication, he insists with the gravity of a stage magician, is simple:

“Bitcoin and quality shitcoins will mechanically levitate in fiat terms as the quantity of paper money rises.”

He sketches a lurid theater: the New York Federal Reserve, in cahoots with the U.S. Treasury, conjure new dollar reserves to buy Japanese yen. The yen, in turn, would be coaxed into buying Japanese Government Bonds. The aim would be to harden the yen and depress JGB yields, stopping Japanese investors from selling U.S. Treasuries to bring funds home, lest a stampede raise the cost of borrowing for everyone with a mortgage and a dream.

He points to a real thing that looked like a theatrical cue: a “rate check” by the New York Fed on USD/JPY on January 23. Analysts at QCP Capital noted on January 26 that this action hinted at official sensitivity to a weakening yen and made traders retreat behind their screens. Hayes reads this as the Fed “deliberately and publicly telegraphing its intentions.”

The legal mechanism, in his telling, involves the Treasury’s Exchange Stabilization Fund and the Fed’s authority to hold foreign currency assets. He writes,

“Buffalo Bill Bessent can intervene in the currency markets… The Treasury taps the NY Fed to help manipulate the markets.”

For him, the sign of truth would appear in the weekly growth of the “Foreign Currency Denominated Assets” on the Fed’s balance sheet-a ledger that grows like a rumor with a heartbeat.

Market Skepticism, Yet the Stage Persists

The tale collides with a chorus of skepticism in the crypto-carnival. Bitcoin has struggled to stay above the imaginary line of $90,000, trading around $89,000 as this is written, after a flirtation with lower heights. Other sages look to Japan for macro direction; Michaël van de Poppe suggested last week that intervention by the Japanese Central Bank in the bond markets could allow risk-on assets to continue their frolic.

Hayes, for his part, admits that his idea is a theory for now, noting, “What I will present is a theory which the actual flow of money… doesn’t support yet.” He hedges his trading on a visible expansion of the Fed’s balance sheet. His wager is that such intervention would unleash dollar liquidity across the globe, weaken the dollar index, and feed the engines of asset-prices inflation.

For crypto investors, the BitMEX cofounder’s analysis reframes the Fed’s balance-sheet reports as spellbinding data points-moments when the curtain lifts and the next movement in the market theater might reveal itself, if the audience is paying attention and the house lights don’t fail.

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2026-01-28 11:12