Bitcoin’s price has been stuck in a narrow range since last October’s crypto market crash. According to BitMEX co-founder Arthur Hayes, this stagnation could end if the U.S. Federal Reserve intervenes to stabilize Japan’s bond market.

In his latest essay, titled ‘Woomph,’ Hayes proposed that the Fed’s money printing to support Japan’s struggling bond market could act as the catalyst for a potential Bitcoin price surge. He noted that a meltdown in the yen and Japanese government bond (JGB) markets could lead to money printing by the Bank of Japan or the Fed.

‘Will a meltdown of the yen and JGB markets cause some sort of money printing by the BOJ [Bank of Japan] or the Fed? The answer is yes,’ Hayes wrote. ‘This discussion of Japanese financial markets is important because for Bitcoin to exit its sideways funk, it needs a healthy dose of money printing.’

The theory comes amid challenging conditions in Japan’s financial markets. The yen continues to weaken, and government bond yields are rising, putting pressure on the market. This situation is particularly relevant as Japan prepares to launch crypto ETFs by 2028, as reported by CoinGape.

Hayes added that Japanese investors could sell U.S. Treasuries to invest in higher-yielding Japanese bonds, potentially creating a ripple effect in the U.S. financial system. He believes the Federal Reserve could step in by creating dollar reserves with major financial institutions like JPMorgan.

To support the yen, the Fed could exchange dollars for the Japanese currency and use them to buy Japanese government bonds. This move could significantly lower bond yields and increase the Fed’s balance sheet under foreign currency assets.

If the Federal Reserve prints money to support Japan, it would add liquidity to the global financial system. Historically, such actions have benefited assets like Bitcoin, as investors seek better returns. Money printing can also reduce the value of fiat currencies like the dollar, making Bitcoin more attractive as a hedge against inflation.

Currently, Bitcoin’s price is stuck below $100,000. As of press time, BTC was trading at $89,209, with a marginal 0.9% increase in a day. The cryptocurrency has struggled to maintain momentum since last year’s market collapse.

Hayes believes that without a new round of money printing, Bitcoin may continue to move sideways. However, any confirmed intervention by the Federal Reserve or the Bank of Japan could shift market sentiment and trigger a Bitcoin price surge.