Huo Xing Finance reports that on September 3, BitMEX co-founder Arthur Hayes, in his latest article, stated that his current macro trading "North Star" is the EUR/JPY pair, which he expects to decline from its current level of approximately 185 to 140 or lower by June next year. He believes that U.S. Treasury Secretary Scott Bessent is pushing the dollar weaker relative to the yen, while simultaneously guiding capital flows back to Japan and other Asian countries through policy measures, and pressuring European assets. Hayes notes that France’s high fiscal deficit, rising government debt, and heavy reliance on foreign capital make it the most vulnerable link in the eurozone, exposing French banks and government bond markets to sustained capital outflow pressures. Hayes further points out that Japanese corporations are being required to accelerate the repatriation of overseas funds, which will strengthen the yen and likely lead Japanese and other Asian investors to reduce their holdings of European assets. As French government bonds and bank debt are sold off, French banks—particularly France’s global systemically important banks—may scale back their repo market financing activities. If French banks withdraw from portions of the repo market, this could raise U.S. Treasury financing costs and force hedge funds to deleverage, prompting the New York Fed to expand its repo market operations (RMP), potentially accelerating the Fed’s balance sheet expansion to nearly $10 billion per month. Hayes believes this chain of events will ultimately form a “tighten first, then ease” liquidity sequence: a decline in EUR/JPY will serve as a leading indicator of escalating risks in French banks and impending expansion of dollar liquidity; the Fed’s increased dollar supply via RMP and FIMA repo mechanisms may further boost global fiat liquidity. He states that crypto markets will be among the fastest beneficiaries of this liquidity expansion and recommends investors consider short EUR/JPY put options while maintaining a structural long position in Bitcoin. Hayes also reiterates his price targets for the end of 2026: Ethereum (ETH) at $10,000, Ethena (ENA) at $0.50, and ETHFI at $2.
Arthur Hayes Predicts ETH to Reach $10,000 by Year-End, Sees Fed Expansion Boosting Crypto Liquidity
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Summary
Arthur Hayes forecasts ETH reaching $10,000 by year-end, connecting liquidity and crypto markets to potential Fed RMP expansions of nearly $100 million per month. He notes that EUR/JPY could drop to 140 by 2026 as U.S. policy pressures yen carry trades and European assets. Hayes identifies France as the eurozone’s weak link amid fiscal strain and warns of capital outflows impacting repo market activity. With MiCA approaching, he urges investors to focus on shorting EUR/JPY and taking structural long positions in Bitcoin.
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