Bitcoin is expected to set for growth as the Japanese Yen reaches record low. A month ago, Arthur Hayes, founder of BitMEX exchange, expressed optimism about the weakening Japanese Yen (JPY), viewing it as a potential catalyst to inject liquidity and boost Bitcoin [BTC] and the broader crypto market.
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Japanese Yen Reaches Record Low
On June 26th, the JPY reached its lowest point against the U.S. dollar in nearly 38 years, prompting speculation about possible interventions by authorities in the currency markets. The Federal Reserve’s decision to maintain high interest rates has significantly impacted the JPY, making it one of the world’s poorest-performing currencies.
Reflecting on this situation and echoing Hayes’ sentiments, The Bitcoin Therapist commented: “Is Japan printing Yen to secretly buy bitcoin? If so, it would be the smartest move in the history of Japan. If not, they will become a third-world country really soon.”
Record Weakness and Market Reactions
According to FactSet data, the Yen weakened to 160.82 against the dollar, surpassing the previous record of 160.03 set on April 29th, marking its weakest level since 1986. Jeroen Blokland, founder and manager of the Blokland Smart Multi-Asset Fund, noted:
“Over the last 12.5 years, the Japanese #Yen has lost a whopping 53% of its value against the US Dollar!” This dramatic devaluation caused significant ripple effects within the financial community. ZeroHedge, with a touch of sarcasm, remarked on the implications for Bitcoin.
Implications for Bitcoin
Hayes believes that a weakening Yen might trigger competitive currency actions among major economies, such as Japan and China, potentially leading to currency devaluations and increased liquidity injections (printing money). This scenario could benefit Bitcoin, which is often perceived as a hedge against fiat currency devaluation.
Hayes anticipates that Bitcoin will perform well under these macroeconomic conditions, highlighting it as a resilient asset amidst global fiat currency instability. As he succinctly put it: “Crypto booms as more dollar and yuan liquidity is floating in the system.”
Current Bitcoin Performance
As the Yen faced bearish pressure, BTC appreciated by 0.56%, reaching a trading price of $62,130.05. However, the Relative Strength Index (RSI), significantly below the neutral level, indicated a strong bearish sentiment. If Bitcoin manages to surpass the resistance level at $64,817, it could signal a potential shift into a bullish phase.
https://www.cryptowaves.app/relative-strength-index/BTC
Conclusion
To conclude, the Japanese Yen reaches record low. The weakening Japanese Yen presents a unique opportunity for Bitcoin’s growth, as increased liquidity injections and potential currency devaluations make BTC a favorable hedge against fiat instability. Investors should keep an eye on these macroeconomic shifts as Bitcoin navigates its path to potential bullish momentum.
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