Bitcoin Price Could Rally as Fed Balance Sheet Expansion Looms

BTC price declined as the yen strengthened in late January. He exited long positions in Strategy (MSTR) and Metaplanet (3350 JP), levered Bitcoin proxies, before yen volatility accelerated.

Trading Strategy Waited for Balance Sheet Confirmation

Hayes outlined a wait-and-see approach pending confirmation of the Feds balance sheet data. He planned to increase Bitcoin holdings once Foreign Currency Denominated Assets showed week-over-week growth.

This would signal that the Fed was actively printing dollars to fund yen and JGB purchases, validating the liquidity injection thesis.

Maelstrom, Hayess fund, continued accumulating Zcash (ZEC) while maintaining DeFi token positions. Those tokens were Ethena (ENA), Ether.fi (ETHFI), Pendle (PENDLE), and Lido DAO (LDO). Hayes indicated the fund would add to these positions if Fed balance sheet expansion materialized.

The intervention mechanism required gradual yen appreciation to avoid triggering carry trade liquidations that could spark broader financial instability.

Hayes suggested that controlled yen strength would prevent crisis conditions while expanding dollar liquidity through the back door. This balanced execution would benefit Bitcoin price without causing the volatility spikes that historically preceded crypto selloffs.

What Fed Intervention Means for Bitcoin USD？

Hayes‘s framework positioned Bitcoin’s price appreciation as a mechanical outcome of the Feds balance sheet policy rather than a speculative bet. The intervention scenario created dollar liquidity expansion disguised as currency stabilization operations.

This represented the monetary conditions Bitcoin historically required to break from consolidation ranges and establish new uptrends. The setups effectiveness depended on execution pace and market perception.

Rapid yen strength could trigger destabilizing carry trade unwinds before Bitcoin price benefited from increased liquidity. A controlled intervention that gradually expanded the Fed‘s balance sheet would support BTC’s price without sparking the volatility that preceded risk-off episodes.

Hayes framed the Japan intervention as evidence that central banks would continue monetary expansion despite official policy rhetoric.

This would validate the long-term thesis that fiat currency debasement would drive Bitcoin appreciation against the dollar as investors sought stores of value outside the traditional financial system.