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Arthur Hayes's "Liquidity Domino": A Complete Rundown from EUR/JPY to ETH 10,000 Arthur Hayes said ETH will reach $10,000 within the year. Not by faith. It was a macro domino of "EUR/JPY falling to 140." Don't swipe away. This might be the most important macro analysis you've seen this year. On September 3rd, BitMEX co-founder Arthur Hayes published a new article. He reiterated his price target for the end of 2026: ETH → 10,000 ENA → 0.5 ETHFI → 2 His fund has described the position as "maximizing risk exposure." But this is not a call to sell. Hayes provides a complete macro logical chain. This chain starts with EURJPY (EURJPY), ends with the Fed's money printing, passes through France, Japan, the repo market, hedge funds—and finally ends with your ETH holdings. Domino One: EURJPY 185 → 140. Hayes said this is the "North Star" of his current macro trade. The exchange rate is expected to drop from the current about 185 to 140 or lower by June next year. U.S. Treasury Secretary Bessent is driving the dollar weaker against the yen, while also guiding capital outflows from Japan and other Asian countries through policies, putting pressure on European assets. Bessent has recently publicly urged the Bank of Japan to raise interest rates multiple times, and the market has fully priced in expectations of a 15% rate hike this month. This is not speculation. This is the policy direction of the U.S. Treasury. Domino Two: French Bomb. Where will the first wave of Japanese capital flow flow back? France. Hayes pointed out that France's high fiscal deficit, rising government debt, and dependence on foreign capital make it the most vulnerable link in the Eurozone. Data doesn't lie— As of September 2, the yield on France's 10-year government bonds had reached 4.17%, approaching the peak in November 2008. On September 1, it even surged to 4.21%, the highest since 2008. The French government's total debt as a percentage of GDP is expected to reach 118.5% in 2026 and exceed 120% in 2027. Zero economic growth + debt explosion + political division = the bomb has already started smoking. Three: French banks exit the Repo market. The Bank of France is the main holder of French government bonds. When government bonds are sold off, banks suffer. On August 27, shares of Société Générale, Crédit Agricole, and BNP Paribas fell by 3.3% to 4.3% respectively. Hayes's logic is that as French government and bank debt are sold off, French banks—especially those of France's global systemically important banks—will reduce their repurchase market financing activities. French banks account for about 20% of the U.S. repo market. Once they withdraw— The repo rate will soar. Fourth: The Federal Reserve is forced to expand its balance sheet. This is the most critical link in the entire chain. French banks exiting the Repo market → pushing up U.S. Treasury financing costs → forcing hedge funds to deleverage. Hedge funds deleveraging → markets need liquidity → the New York Fed has been forced to expand its repo market operations (RMP). Hayes expects the Fed's balance sheet expansion to accelerate to nearly $10 billion per month. Note one detail—the Fed just unexpectedly paused RMP purchases in August, bringing them to zero. Wall Street had originally expected it to remain around $10 billion. But Hayes's judgment is: the pause is only temporary. Once France's thunder goes off, the Fed will have no choice but to reopen the floodgates and inject liquidity. This is not quantitative easing. It is "forced balance sheet expansion"—liquidity forced out by global financial markets. Domino Five: Liquidity Influx into Crypto. The last card. The Federal Reserve increased the supply of dollars through RMP and FIMA repurchase mechanisms→ boosting global fiat liquidity. The crypto market is one of the fastest-benefiting assets for liquidity expansion. Hayes's exact words: This series of changes will eventually form a liquidity chain of "tighten first, then release liquidity." A decline in EURJPY will be a leading indicator of increased risk for French banks and impending expansion of US dollar liquidity. In other words: don't focus on the candlesticks. The real signal is on the EURJPY exchange rate chart—that's the countdown to the Fed's next round of money printing. String these five cards together— Domino One: Bessent pushes the US dollar weaker→ EURJPY drops from 185 to 140 Domino Two: Japanese Capital Flows Back → French Government Bonds Sold → Yield Soars to 4.17% Domino Three: French banks injured → withdrawn from the Repo market Domino 4: Repo rates soar → hedge funds deleverage → The Fed is forced to expand its balance sheet Domino Five: Dollar Liquidity Overflows → Crypto Market Takes Off ETH → 10,000 Some may ask: Is this logic reliable? Look at the data yourself. The yield on France's 10-year government bonds was still 3.34% at the beginning of March, 3.95% on July 31, 4.09% on August 18, and 4.17% on September 2. It rose nearly 100 basis points in half a year. And it's still accelerating. The Franco-German spread has widened for three consecutive months, rising above 87 basis points on August 21. Analysts say: Even if the spread rises to 100 basis points, it wouldn't be surprising. French bank stocks have already started to fall. This is not theoretical deduction. This is a reality that is happening. Most people watch the crypto market only by whether BTC rises or ETH falls. But real money never flows in candlesticks. It flows in exchange rates, bond yields, and repo markets. Hayes understood this, so he dared to demand $10,000 worth of ETH. You don't understand this, so you can only chase highs and sell lows. Hayes advises investors to focus on EURJPY put options while maintaining a structured long position on Bitcoin. His logic is clear: the faster EURJPY falls, the harder the Fed prints, and the higher your ETH rises. Deduction doesn't need to be 100% accurate. Deduction only needs to teach you to look farther while others are still looking at candlesticks $ETH $BTC $ENA