The supply of dollars may increase, and the bull run in the crypto market is expected to continue.

Recently, Japan's Norinchukin Bank announced it will sell $63 billion in U.S. and European bonds. This news has raised concerns about the possibility of a large-scale sell-off of U.S. Treasury bonds by the Japanese banking system. Against the backdrop of global economic turmoil and financial market volatility, the Japanese banking system is facing significant challenges brought about by the Federal Reserve's interest rate hike cycle.

Japanese commercial banks have been purchasing a large amount of U.S. Treasury bonds and conducting foreign exchange hedging to achieve higher returns on yen deposits. However, as the interest rate difference between the U.S. and Japan widens, the cost of foreign exchange hedging has significantly increased, forcing these banks to start selling U.S. bonds. It is estimated that Japanese commercial banks hold about $450 billion in U.S. bonds.

U.S. Treasury Secretary Yellen may not allow these bonds to be sold off in large quantities on the open market to avoid a surge in U.S. Treasury yields. She is expected to request the Bank of Japan to purchase these bonds and then use the Federal Reserve's Foreign and International Monetary Authorities ( FIMA ) repurchase mechanism to exchange U.S. Treasuries for newly printed dollars.

The expansion of the FIMA repurchase mechanism means an increase in dollar liquidity in the global monetary market. This could have a positive impact on Bitcoin and the crypto market. In an election year, the U.S. government also has the motivation to maintain a low interest rate environment to avoid turmoil in the financial markets.

Therefore, although the Federal Reserve may slow down its rate cuts, the Bank of Japan's system selling U.S. Treasuries could become a new driver for increased dollar supply. This is expected to bring a new round of bull run to the crypto market. For crypto investors, this may be a good opportunity to buy on dips.