BitMEX Founder Predicts The Dawn Of ‘Crypto Valhalla’: When Will It Start?

As a seasoned crypto investor with a keen interest in global monetary policies, I find Arthur Hayes’ latest essay on the impending “Crypto Valhalla” particularly insightful. The complex interplay of economic strategies between major economies like Japan, the United States, and China, as analyzed by Hayes, offers valuable perspectives for those of us closely monitoring the crypto landscape.

In a new essay named “The Easy Button,” Arthur Hayes, the founder of BitMEX crypto exchange, explores how global monetary policies influence the upcoming “Crypto Valhalla.” By examining the monetary strategies of significant economies like Japan, the United States, and China, Hayes sheds light on their impact on the cryptocurrency sphere.

The Dawn Of Crypto Valhalla

The Federal Reserve, under Hayes’ proposal, could work in collaboration with the US Treasury to carry out unlimited currency swaps of dollars for yen with the Bank of Japan (BOJ). This move aims at adjusting exchange rates and maintaining stability in the yen market, all while preventing significant economic disruptions.

I, Hayes, explain that the Federal Reserve has the authority, upon instructions from the Treasury, to exchange dollars for yen in infinite quantities and for an indefinite period with the Bank of Japan. This maneuver is intended to prevent imminent financial catastrophes by postponing tough economic decisions.

As an analyst, I would rephrase it as follows: The forecasted consequences for Japan’s economy are dire, according to Hayes, who warns of significant repercussions should the Bank of Japan (BOJ) choose to increase interest rates: “Raising interest rates would amount to seppuku for the BOJ,” Hayes emphasizes, employing the evocative Japanese term for ritual suicide to highlight the potential economic self-destruction. Given that the BOJ holds the largest portion of Japanese Government Bonds (JGBs), any rate hike would result in substantial losses for them.

A weaker yen can negatively impact China’s position in the global economy, particularly in terms of exports. According to Hayes, this occurs because a devalued yen makes Japanese goods more affordable on international markets, leading to increased competition for Chinese exports.

As a crypto investor, I believe there’s a possibility that in response to the continued weakening of the yen, the People’s Bank of China may devalue the yuan to preserve competitiveness. If this trend persists, China could retaliate by devaluing its currency. This economic back-and-forth could potentially create instability in global financial markets.

Hayes proposes an intriguing theory regarding a significant change in China’s monetary policy. According to his hypothesis, China might utilize its extensive gold reserves to link the value of its currency, the yuan, to gold. This potential move could result in a new economic setup.

According to estimates, China is believed to have amassed approximately 31,000 tonnes of gold. In my opinion, there are both domestic and international political motivations driving China’s desire to maintain the dollar-yuan exchange rate stability. By linking its currency to gold, China could theoretically shield itself from fluctuations in currency values and gain more control over its economic pathway.

The essay explores the connection between American politics and economic policies, with a focus on the upcoming presidential election. According to Hayes, economic pressures within the country, including unemployment and the return of manufacturing industries, may have a substantial impact on the Biden administration’s policy-making.

The administration may choose not to take confrontational actions against China to avoid negative reactions in crucial voting regions, as President Biden needs to secure these states to prevent a challenge from the previous administration. A yuan devaluation prior to the election could harm Biden’s efforts.

According to Hayes, these international currency strategies might create a positive environment for cryptocurrencies. He recommends that crypto traders and large investors keep a close eye on the USDJPY exchange rate, as substantial changes could signal advantages for cryptocurrency evaluations.

As an analyst, I would recommend keeping a keen eye on the USDJPY exchange rate, as its movements could prove just as significant as Solana developers monitoring their platform’s uptime. This heightened attention is warranted due to the potential for substantial financial opportunities in the cryptocurrency sector.

Based on Hayes’ perspective, a significant increase in USDJPY up to 200 is equivalent to triggering the iconic “Push the Button” track by The Chemical Brothers. This musical metaphor emphasizes the sense of immediacy and extreme measures needed to address such an imbalanced currency situation.

If my hypothesis comes true, it would be effortless for any institutional investor to purchase one of the Bitcoin ETFs listed in the US. Bitcoin has been the top-performing asset amidst global fiat currency devaluation, and they are well aware of this fact. Once action is taken regarding the weak yen, I will make an educated estimation of how funds flowing into Bitcoin could potentially push the price to $1 million or even higher. Keep your creativity flowing, stay bullish, this isn’t the time to be timid.