The Japanese banking crisis seems to be on the verge of a major escalation, which could lead to an injection of US dollar liquidity and boost the Bitcoin (BTC) and broader cryptocurrency markets.
In a blog post published on XX, BitMEX founder Arthur Hayes discussed the potential impact of the Japanese banking crisis and described it as a key factor for the cryptocurrency market.
“This is just another pillar for the bullish cryptocurrency market,” Hayes said.
He emphasized that Japan’s fifth-largest bank, Norinchukin Bank, is already under pressure and plans to sell $6.3 billion worth of US and European bonds.
Read more: 
Breaking news: Standard Chartered becomes one of the first global banks to enter cryptocurrency trading
Hayes stated that the US may have to intervene to resolve the crisis, which could result in “injecting US dollar liquidity.”
The potential benefits for Bitcoin
The expert stated that Norinchukin Bank’s sale of US Treasury bonds (UST) could prompt other major Japanese banks to follow suit.
“All major banks in Japan may emulate Norinchukin Bank’s actions by selling their UST investment portfolios to alleviate the situation. This could lead to a rapid exit of $45 billion from the UST bond market,” Hayes said.
However, Hayes pointed out that the US can intervene to prevent this scenario from happening because “yields will skyrocket,” making funding for the federal government more expensive.
To address this issue, the US can persuade the Bank of Japan (BoJ) to use repurchase agreements to “absorb the supply of UST.” In return, the US would provide the Bank of Japan with “newly printed USD,” which would increase the liquidity of the US dollar.
Read more: 
Stablecoins will account for 10% of the world’s currency in the next decade
Hayes also recalled a similar situation in the fourth quarter of 2023, which led to a rise in risk assets, including cryptocurrencies. He also noted that the US banking crisis in 2009 resulted in a 1000% increase in BTC after the bailout announcement.
“In an election year, the last thing the ruling Democratic Party needs is a sharp increase in government bond yields, which would affect the financial difficulties of the general public,” explained Hayes.
Therefore, the next injection of liquidity in the US may come from the Japanese crisis, providing an opportunity for cryptocurrency investors. Hayes suggested investors to “buy on dips.”
