Arthur Hayes Says Bitcoin Has Entered New Bull Market as US Treasury Buybacks Boost Liquidity

Bitcoin stands to benefit first as expanded long-dated US Treasury buybacks add dollar liquidity to the financial system, according to Arthur Hayes.

In a Substack post titled "Same Same But Different" published on Aug. 24, the BitMEX co-founder wrote that Treasury Secretary Scott Bessent's expansion of long-term Treasury buybacks would in effect inject dollar liquidity into markets. Bitcoin would be the first asset to benefit, he wrote.

Hayes also expects the Treasury to keep increasing the scale of its buybacks. If roughly $1 trillion held in the Treasury General Account, or TGA, is also pushed into markets, financial-market liquidity could expand further.

He also raised the possibility of a more aggressive policy response if the 10-year US Treasury yield climbs above 5%. In that case, the Treasury could shift toward a policy close to de facto yield curve control, or YCC.

Against that liquidity backdrop, Hayes said Bitcoin has entered a new bull market. He warned, however, that the rally could bring much larger price swings than in previous cycles.

Maelstrom, the investment firm led by Hayes, has also significantly increased its exposure to risk assets. He said the portfolio is now in "maximum risk" mode, with major positions in Bitcoin, Ether, Ethena and Ether.fi.