Arthur Hayes Says Crypto Could Enter ‘Up Only’ Phase Once US Treasury Reaches $850B
BitMEX co-founder links market rally to Treasury General Account target
Crypto markets could shift into a sustained bullish phase once the US Treasury completes its plan to fill the Treasury General Account (TGA) with $850 billion, according to Arthur Hayes, co-founder of BitMEX.
“With this liquidity drain complete, up only can resume,” Hayes wrote Friday, noting that the TGA’s balance had already crossed $807 billion. Funds directed into the TGA are temporarily removed from circulation, reducing liquidity in private financial markets.
Hayes argued that once the Treasury hits its target, liquidity will start flowing back into markets, providing fuel for risk assets like Bitcoin. However, not all analysts are convinced.
“Net liquidity has a loose correlation to Bitcoin and crypto at best,” said André Dragosch, head of research at Bitwise in Europe. “Think that is a useless banana in my view.”
Despite skepticism, many traders expect broader liquidity conditions to improve in the coming months, particularly as the Federal Reserve moves deeper into its rate-cutting cycle.
Fed cuts rates for first time in 2025 as markets look ahead
The US Federal Reserve lowered interest rates by 25 basis points on Wednesday, its first rate cut since 2024. Bitcoin briefly dropped below $115,000 following the announcement in a classic “sell-the-news” reaction.
Nic Puckrin, founder of Coin Bureau, suggested markets had already priced in the cut but warned of a potential short-term pullback.
Federal Reserve Chair Jerome Powell said policymakers remain divided on further cuts, but futures markets suggest otherwise. According to CME Group data, over 91% of traders expect the Fed to lower rates by up to 50 basis points at its next meeting in October.
With both Treasury policy and Fed decisions in play, crypto investors are closely watching liquidity flows that could set the stage for the next leg of the bull market.
