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Arthur Hayes points to $60 billion Fed cap on FIMA as Bitcoin trigger
Hayes argues the Fed could expand the FIMA repo channel to revive offshore dollar liquidity, after foreign-official repo activity was at zero for the week ended Aug. 5.
Arthur Hayes says the next catalyst for bitcoin and other risk assets is a change to the Federal Reserve’s FIMA repo program, specifically the current $60 billion cap on total outstanding FIMA exposure per counterparty. In an Aug. 11 essay, he framed expanding that liquidity backstop as the missing piece before he adds more aggressively to trades tied to dollar funding conditions, including bitcoin.
FIMA allows approved foreign official accounts to borrow dollars temporarily against US Treasury collateral, a structure Hayes links to supporting currency intervention without an outright Treasury sale. CryptoSlate notes foreign-official repurchase agreements were reported at zero for the week ended Aug. 5, leaving the proposed bitcoin liquidity channel dormant in the latest H.4.1 release.
Hayes is also waiting for the Foreign Currency Subcommittee to use its authority to alter FIMA terms, such as the rate, maturity, eligible counterparties, or the counterparty limit. He points to Japan’s recent intervention estimates, including implied two day outlays near $95.6 billion around July 30-31, which he says already exceed one current FIMA counterparty limit.
CryptoSlate further reports that US Treasury Secretary Scott Bessent has urged the Fed to expand FIMA, describing it as a way for Japan to obtain dollars against Treasuries while avoiding market sales. Hayes ties that potential policy setup to a larger US Treasury exposure held by Japan-related entities, including his estimate of a $1.37 trillion theoretical total using GPIF-related holdings and Treasury International Capital data for Japan-attributed Treasury holdings.
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