The Bank of Japan is considering a return to quantitative easing (QE) policy as early as June 2025, which could serve as a significant catalyst for the growth of the cryptocurrency market, particularly the price of Bitcoin. This prospect has attracted the attention of leading market players who believe that the Japanese regulator’s decision could substantially alter the dynamics of risk assets.
This is reported by Finway
Potential Impact of Japan’s Monetary Policy on the Crypto Market
Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX and investment director at Maelstrom, believes that the anticipated meeting of the Bank of Japan on June 16-17, 2025, could be crucial for the market. If the regulator decides to abandon quantitative tightening (QT) and resumes selective QE, it could lead to a significant increase in the prices of risk assets, including Bitcoin.
“If the Bank of Japan postpones quantitative tightening (QT) and reinstates selective QE at the June meeting — risk assets will soar,” Hayes wrote.
The essence of QE lies in the purchase of government bonds and the injection of additional liquidity into the economy, which helps lower interest rates and stimulate economic activity during challenging financial periods. Since August 2024, the Bank of Japan has been implementing a QT strategy that involves gradually reducing the purchase of government bonds by 400 billion yen each quarter.
According to Bloomberg, there is currently discussion about the possibility of halving the pace of bond reduction to 200 billion yen starting in April 2027, which may indicate a shift in the regulator’s outlook on future steps.
Bitcoin as an Investment Hedge
The crisis in the Japanese government bond market, according to Andre Dragosh, head of European research at Bitwise, has prompted institutional investors to consider Bitcoin as a means of protection against potential sovereign risks and defaults. The rising yields on bonds reflect investors’ concerns about Japan’s financial stability and its ability to service its debt.
“The perceived risk of default is rising — yields are increasing? This is one of the key indicators of why Bitcoin could head towards $200,000. It is free from counterparty risk,” Dragosh said in a comment to Cointelegraph.
Traditionally, government bonds are viewed as a “safe haven” for capital; however, the current situation shows that demand for alternative hedging instruments, such as Bitcoin, is increasing. The current price of the first cryptocurrency is $108,736, according to TradingView data.
Previously, Arthur Hayes had already predicted that the price of Bitcoin could reach $250,000 in 2025 and also anticipated the beginning of a new alt season.