- Jamie Dimon foresees disruptions in the Treasury market that may compel the Federal Reserve to step in.
- This may propel Bitcoin “to new heights,” according to Maelstrom CIO Arthur Hayes.
- A senior official from the Federal Reserve mentioned they are prepared to stabilize the market if necessary.
JPMorgan Chase’s CEO Jamie Dimon anticipates a “kerfuffle” in the US Treasury market, which he believes will lead to a Federal Reserve intervention.
In essence, the money printing might commence again shortly.
On Friday, a notable Fed official indicated they are primed to assist in stabilizing the market if required, as reported by the Financial Times.
Treasury yields have started to exhibit volatility, with the 10-year yield climbing to 4.5% from 3.9% earlier this month.
Bitcoin has surged 5.5%, reaching $83,750 over the past 24 hours.
Volatility has been a constant theme since Donald Trump took office. The US president initiated a tariff battle against major trading partners, which unsettled capital markets.
On Wednesday, assets paused when he declared a 90-day postponement of “reciprocal” tariffs on imported goods from all nations except China.
However, Trump did retain a 10% tariff on those countries and significantly increased tariffs on China to 145%.
For Bitcoin, a Fed intervention could spur its next price ascent.
According to Bloomberg, Dimon believes the unrest stems from “all the rules and regulations” and anticipates that the Fed will intervene only when officials “begin to panic a little.”
He is advocating for several changes in banking regulations.
Indeed, the link between instability in the Treasury market and Bitcoin’s valuation is rooted in the Federal Reserve’s response to monetary policy changes. When regulators ease bank capital requirements — a modification Dimon is calling for — extra liquidity tends to flow into high-risk assets like cryptocurrencies.
Only Going Up
Dimon’s remarks have stirred excitement among crypto enthusiasts.
Arthur Hayes, CIO of Maelstrom and crypto enthusiast, remarked, “What Jamie Dimon desires, Jamie Dimon achieves.”
“We need the SLR exemption to propel BTC to new heights.”
SLR refers to the “Supplementary Leverage Ratio,” a critical banking regulation mandating large banks to maintain a minimum capital ratio against their total leverage exposure.
Should the Fed eliminate the SLR, it would enhance liquidity and enable banks to take on more risks.
So, what does all this imply?
“We are on the brink of entering UP ONLY mode for BTC,” stated Hayes.
Pedro Solimano is a markets correspondent located in Buenos Aires. Got a tip? Reach out to him at [email protected].
