Analyst Explains Declining Japanese Yen Could Be Bullish for Bitcoin, Here’s How

The global macro developments have sent jitters across the broader cryptocurrency market leading to increased volatility. In an interesting analysis, a Swan Bitcoin executive stated that a declining Japanese Yen could be a boon for Bitcoin, even if it ends up as a “disaster” for US Treasuries.

Over the last 30 days, the Japanese Yen has lost 2.9% of its value with 1JPY currently having a value of 0.0064 USD. In an episode of Bitcoin Daily on Wednesday, May 8, Swan Bitcoin head of business Dante Cook explained:

“This spells disaster for Japan and the US potentially, as Japan is the largest holder of US treasuries, only 4% of its forex reserves are in gold, the rest are almost exclusively in US Treasuries.”

Cook stated that Japan has no option but to sell its US Treasury holdings in order to “prop up its currency” unless the US government comes up with backdoor liquidity or with a swap line agreement for the two central banks to exchange the currencies.

He suggests that the sell-off could trigger uncertainty in traditional securities, potentially paving the way for a significant influx of liquidity into the market. This surge in liquidity might favor Bitcoin as investors explore safer, alternative stores of value.

Bitcoin has already been enjoying a massive liquidity influx from institutional investors ever since the US Securities and Exchange Commission (SEC) gave the nod for the trading of 11 spot Bitcoin ETFs in the country.

According to Farside data, the 11 spot Bitcoin ETFs have collectively experienced total net inflows amounting to $11.78 billion since their inception. Presently, Bitcoin is trading at $61,680, marking a 7.45% increase over the past week.

Investing in Bitcoin and Altcoins

Cook added that the current uncertainty in the traditional financial market could push more and more people toward using Bitcoin as well as investing in other riskier crypto altcoins. “Since the money is broken, more and more people are turning to gambling,” he claimed.

Additionally, Cook highlighted VanEck, a spot Bitcoin ETF provider, noting its relatively lackluster performance in the ETF competition but its recent introduction of the MarketVector MEMECOIN index.

“It’s somewhat surprising that an institution would provide this to retail customers, yet not entirely unexpected,” he remarked, emphasizing the ongoing uncertainty within traditional financial markets.

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