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Hayes argued, even though Japan raised its interest rates, the country’s overall financial policy is still geared towards inflation, which Hayes sees as a long-term positive driver for Bitcoin
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His comments followed the BOJ’s decision to increase its short-term interest rate to 0.75%, from 0.50%. This marks one of the highest nominal rates Japan has seen for decades
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Hayes’ prediction that the dollar would surge against the Japanese yen (towards 200) shows his belief that Japan will let the currency fall in order to boost growth and wages
Arthur Hayes, co-founder of BitMEX, stirred the crypto market up with his take on Bank of Japan’s recent move. He argued that, even though Japan increased interest rates, the country’s overall financial policy is still geared towards inflation, which he views as a positive driver for Bitcoin on a long-term basis.
In an X message, he wrote “Don’t argue with the BOJ. -ve real rates are the explicit policy.” $JPY up to 200 and $BTC down to a milly .”
The comment came after the BOJ raised its short-term interest rate from 0.50% to 0.75%, making it the highest nominal interest rate Japan has seen in years. Hayes and traders both agreed that the summary of its December 2025 “Monetary Policy Meeting”, which summarized the meeting, included some points that traders focused on immediately.
Related Why the Bank of Japan’s 25 Bps hike could trigger a crypto sell-off
Prices and wages are both rising steadily, and it is likely that companies will continue to raise prices to cover the higher wage costs. CPI (consumer prices index) inflation is also moving closer to the bank’s 2% target, giving policymakers greater confidence that price increases will be a long-term trend.
Even after raising interest rates, the actual cost to borrow money remains far below inflation, so money is still cheap.
The BOJ has stated that it will continue to adjust policy gradually and not aggressively tighten financial conditions.
Hayes links the hike to yen strength, not weakness
Hayes believes the opposite. Hayes’ conventional market logic says that higher rates should strengthen currency, but Hayes is not convinced.
Japan’s economy has negative real returns because inflation is higher than interest rates. This pushes money outside the country, instead of attracting it. The yen remains weak.
Hayes’ prediction of the dollar surging against the yen, (towards 200), shows that he believes Japan is willing to let its currency drop in order to boost growth and wages.
Hayes frames Bitcoin to be the beneficiary of negative real rate
Hayes frames BOJ’s stance from a crypto perspective as quietly bullish towards Bitcoin. Cash loses its purchasing power when inflation is higher than interest rates. This makes Bitcoin and other scarce assets more attractive.
Also, if traders continue to borrow cheap yen and invest elsewhere, this money could still end up in crypto.
Hayes’ famous Bitcoin price target of $1 million is based on Hayes’ belief that governments devalue their currencies slowly, which benefits assets like gold and Bitcoin over time.
Related toArthur Hayes predicts most L1s will crash except Ethereum and Solana
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