Arthur Hayes Predicts: JP Morgan’s Stablecoin Surge Will Catapult Bitcoin to New Heights

Wall Street's embrace of stablecoins might just be the rocket fuel Bitcoin needs.

When banking giants like JP Morgan dive into crypto, even skeptics take notice. Here's why their stablecoin play could send BTC soaring—and how traditional finance is finally playing catch-up.

Stablecoins: The Trojan Horse?

Institutional adoption of dollar-pegged tokens creates the perfect on-ramp for Bitcoin exposure. More liquidity, more infrastructure—more excuses for asset managers to finally allocate to BTC.

The Irony of Legacy Finance

Banks spent years dismissing crypto as a bubble. Now they're building the plumbing that'll make Bitcoin unstoppable. (Cue the 'regulated stablecoins are different' mental gymnastics.)

Bitcoin Wins Either Way

Whether as a hedge against stablecoin risks or the beneficiary of fresh capital flows, BTC stands to gain. The real question: Will Jamie Dimon still hate it at $250K?

JPMorgan’s Stablecoin Strategy

Hayes identified JPMorgan’s stablecoin, JPMD, as a central player in this new liquidity model. The coin enables the bank to tokenize client deposits, reduce compliance costs, and earn a risk-free spread by investing in U.S. Treasury bills.

By issuing stablecoins, Hayes said, JPMorgan could unlock up to $6.8 trillion in Treasury bill purchasing power. He argued that even a partial conversion of JPMorgan’s deposits into JPMD could yield hundreds of billions in low-risk, high-margin earnings, potentially doubling or tripling the bank’s market capitalization.

The adoption of stablecoins by TBTF [Too Big to Fail] banks creates up to $6.8 trillion of T-bill buying power, he added. 

Regulatory Tailwinds

Hayes also pointed to the proposed GENIUS Act, which he claims could hand large banks a near-monopoly over stablecoin issuance. Such regulation WOULD marginalize fintech firms like Circle, which currently operates the USDC stablecoin.

“The real stablecoin play isn’t betting on crusty FinTechs like Circle—it’s understanding that the US government just handed TBTF banks the launch keys to a multi-trillion-dollar liquidity bazooka disguised as ‘innovation’,” Hayes wrote.

According to Hayes, include increased demand for U.S. Treasuries without the need for new rounds of quantitative easing. This could suppress yields and reflate risk assets—conditions historically favorable for Bitcoin.

Hayes emphasized that bitcoin thrives during periods of expanding liquidity and falling interest rates. He argued that this new stablecoin-fueled financial architecture would be highly bullish for the leading cryptocurrency.

Meanwhile, ethereum may also benefit. JPMD is expected to operate on Base, a layer-2 blockchain developed by Coinbase and built atop Ethereum. As a result, Ethereum would serve as the underlying settlement layer for a potentially massive flow of stablecoin transactions.This is debt monetization dressed in Ethereum drag, Hayes quipped

Analysts further noted that Ethereum’s staking yield could make it attractive for corporate treasuries—potentially sparking a new wave of institutional demand.

Hayes’ prediction indicates a fundamental shift in how liquidity is managed in the U.S. financial system.

Also Read:Crypto Highlights: Top Gainers and Losers on CoinMarketCap Today