Arthur Hayes Predicts Bitcoin Rally If U.S. Treasury Boosts Liquidity

Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, wrote that U.S. Treasury Secretary Scott Bessent may expand Treasury buybacks, increase short-term bill issuance, and draw down funds from the Treasury General Account (TGA) to lower long-term U.S. Treasury yields. Hayes believes such “active fiscal issuance” resembles the approach taken by Yellen in 2023, when short-term debt issuance guided money market fund flows away from the Fed’s reverse repo facility, previously driving gains in risk assets and Bitcoin. Hayes noted that if the U.S. 10-year Treasury yield approaches or exceeds 5%, it could significantly raise costs for residential mortgages and corporate financing, potentially prompting further Treasury intervention in the bond market. He expects that if U.S. dollar liquidity continues to expand, Bitcoin and the broader crypto market could benefit, though sharp pullbacks may still occur along the way.