- Jamie Dimon predicts turmoil in the Treasury market will force the Federal Reserve to intervene.
- It will send Bitcoin “orbital,” said Maelstrom CIO, Arthur Hayes.
- A top Fed official said they are ready to help stabilise the market.
JPMorgan Chase CEO Jamie Dimon is predicting a “kerfuffle” in the US Treasury market that will trigger an intervention from the Federal Reserve.
In other words, the money printer could get switched on again soon.
On Friday, a top Fed official said they are ready to help stabilise the market if needed, reported the Financial Times.
Treasury yields have already begun showing signs of volatility, with the 10-year yield soaring to 4.5% from 3.9% earlier this month.
Bitcoin is up 5.5% to $83,750 in the past 24 hours.
Volatility has been the name of the game since Donald Trump took office. The US president kicked off a tariff war against all major trading partners, which has shaken capital markets.
On Wednesday, assets finally took a breather when he announced a 90-day delay for “reciprocal” tariffs on imported goods from all countries except China.
Trump did maintain a 10% tariff on those countries, however. And he raised tariffs on China to a whopping 145%.
For Bitcoin, a Fed intervention could provide the legs for its next price rally.
According to Bloomberg, Dimon reckons the turmoil is due to “all the rules and regulations” and believes the Fed will only step in when officials “start to panic a little bit.”
He is advocating for a number of bank rule changes.
Indeed, the connection between Treasury market instability and Bitcoin’s price lies in the response to monetary policy that the Federal Reserve has. When regulators loosen bank capital requirements — a rule change that Dimon is looking for — excess liquidity often flows into risk assets such as cryptocurrencies.
Up only
Dimon’s words made crypto pundits tingle with excitement.
Arthur Hayes, Maelstrom CIO and crypto angel investor, said “What Jamie Dimon wants, Jamie Dimon gets.”
“SLR exemption is what we need to send BTC orbital.”
SLR stands for “Supplementary Leverage Ratio.” It is a key banking regulation that requires large banks to hold a minimum amount of capital against their total leverage exposure.
If Fed removes the SLR, it will increase liquidity and allow banks to take more risks.
So what does this all mean?
“We are about to enter UP ONLY mode for BTC,” said Hayes.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
