- Arthur Hayes says larger Treasury buybacks could increase dollar liquidity and fuel Bitcoin’s new bull market.
- Hayes expects Treasury operations to remain a key liquidity tool, potentially supporting risk assets as debt pressures increase.
- Maelstrom has moved to maximum exposure across Bitcoin, Ethereum, Ethena, and Ether.fi despite expected market volatility.
Arthur Hayes said Bitcoin has entered a new bull market as U.S. Treasury buybacks increase dollar liquidity across financial markets. In his latest essay, Same Same But Different, the BitMEX co-founder argued Treasury Secretary Scott Bessent’s larger long-dated bond buybacks could support Bitcoin. Hayes also said Maelstrom now holds maximum exposure to BTC, ETH, ENA and ETHFI.
Hayes Links Treasury Policy to Bitcoin Liquidity
According to Hayes, Treasury market interventions can increase dollar liquidity without direct Federal Reserve easing. He argued that this liquidity historically reached risk assets, including Bitcoin.
Hayes compared Bessent’s approach with former Treasury Secretary Janet Yellen’s 2023 Treasury issuance strategy. During that period, Yellen increased short-term bill issuance while reducing longer-duration borrowing.
Hayes said money market funds moved capital from the Federal Reserve’s Reverse Repo Program into Treasury bills. According to his essay, the RRP balance later declined from roughly $2.5 trillion to $100 billion.
He argued that this shift released substantial liquidity into financial markets. Hayes said Bitcoin and the Nasdaq 100 both rose during that period while yields retreated.
Bessent Expands Long-End Treasury Buybacks
Hayes said Bessent announced larger Treasury buybacks on Aug. 19, increasing long-end purchases by $20 billion. The announcement briefly pushed 10-year Treasury yields lower before they reversed higher the following session.
According to Hayes, the Treasury currently faces pressure as the U.S. debt stock approaches $40 trillion. He argued that modest buybacks may prove insufficient if yields continue rising. Hayes outlined two possible paths for Treasury policy.
One involves steadily expanding buybacks alongside other liquidity programs. The other involves stronger intervention if 10-year yields move above 5%. Hayes described that scenario as de facto yield-curve control through unlimited longer-dated bond purchases.
Maelstrom Moves to Maximum Market Exposure
Hayes also pointed to roughly $1 trillion held inside the Treasury General Account. He said Bessent could potentially deploy those funds toward additional buybacks, citing recent CNBC reporting.
However, Hayes said he does not expect immediate Federal Reserve rate cuts or unlimited quantitative easing. Instead, he expects Treasury operations to remain the primary liquidity tool.
He added that Bitcoin’s bull market could include sharp volatility and significant corrections. Despite that expectation, Hayes said Maelstrom has moved to maximum risk. The investment firm currently holds major exposure to Bitcoin, Ethereum, Ethena and Ether.fi, according to Hayes.
