Arthur Hayes, co-founder of BitMEX, believes recent policy shifts by global central banks mark the beginning of a substantial bullish phase for Bitcoin and promising altcoins.

In his latest blog post titled "Group of Fools," Hayes explains how these changes in monetary policy create favorable conditions for growth in the crypto market. He points to significant moments such as the rate cuts by the Bank of Canada (BOC) and the European Central Bank (ECB), which represent the first reductions in benchmark interest rates by G7 countries in years.

According to Hayes, these moves will inject renewed momentum into the crypto market. He stated:

"The trend is clear. Central banks are starting to ease monetary policies. This is the time to heavily invest in Bitcoin and altcoins."

Hayes criticizes the G7's approach to handling the Japanese yen, which he considers misguided. Previously, he proposed that the US Federal Reserve (Fed) should engage in unlimited dollar-yen swaps with the Bank of Japan (BOJ), enabling the Japanese Ministry of Finance to strengthen the yen globally.

However, Hayes observes that the current G7 strategy aims to convince markets that interest rate differentials will narrow over time, leading to increased buying of yen and selling of other currencies.

Central to Hayes' argument is the discrepancy between the BOJ's 0.1% policy rate and the 4% to 5% rates of other G7 central banks, which he believes fundamentally influences exchange rates. He explains that during the pandemic, most central banks raised rates aggressively to combat rising inflation, except for the BOJ, constrained by its substantial holdings of Japanese Government Bonds (JGBs). Raising rates would devalue JGBs, causing substantial losses for the central bank.

Hayes notes that cutting rates to narrow the interest rate differential is now the G7's primary option, despite inflation in these regions remaining above their 2% targets.

Regarding the recent rate cuts by the BOC and the ECB, which Hayes finds unusual given persistent inflation above targets, he speculates they might be coordinated efforts to manage the yen's value and prevent potential devaluation of the Chinese yuan, which could destabilize the global financial system.

Looking forward, Hayes doubts the Fed will cut rates so close to the US presidential election, predicting that the Fed and BOJ will maintain their current policies. He anticipates a potential surprise rate cut from the Bank of England (BOE) following the G7 summit.

Hayes concludes that these rate cuts signify the beginning of a easing cycle that will stimulate the crypto market.

In terms of investment strategy, Hayes indicates he is reallocating from stablecoins back into high-conviction altcoins, with specific tokens to be disclosed once positions are secured. He also encourages projects within his Maelstrom portfolio to proceed promptly with token launches.

Reflecting on historical trends, Hayes points out that both traditional equities and Bitcoin have historically thrived during periods of low interest rates. He cites Bitcoin's surge from under $4,000 to $64,000 between March 2020 and April 2021 following the Fed's drastic rate cut to 0.25%.