According to former BitMEX CEO Arthur Hayes, the declining value of the Japanese yen may prompt actions that increase the value of bitcoin and other cryptocurrencies. Hayes argues that the yen's weakness, driven by a significant interest rate gap with the US dollar, undermines Japan's export competitiveness against China.

To counter this, China might threaten to devalue the yuan unless Japan strengthens the yen, potentially leading the US to intervene. Hayes suggests that the US could pressure Japan to bolster the yen through extensive dollar-yen currency swaps facilitated by the Federal Reserve and the Bank of Japan.

This strategy would increase global dollar supply, weakening the dollar but enabling China to boost its economy without devaluing the yuan. Consequently, the depreciation of the dollar would inflate the prices of dollar-denominated assets such as US stocks and cryptocurrencies like BTC.

Hayes contends that this approach, though unconventional, avoids more drastic measures like raising interest rates by the Bank of Japan or implementing overt yield curve control by the Fed. He predicts that the yen's depreciation could reach a critical point around the US election, prompting policymakers to take action. This scenario could potentially benefit bitcoin as a hedge against increasing global liquidity.

Additionally, Hayes notes that bitcoin's recent surge, driven by ETF speculation and demand, could accelerate once major economies like the US begin lowering interest rates.