Arthur Hayes (former CEO of BitMEX) says the US Debt Ceiling battles create a clear cash movement that moves markets. When the Treasury spends down its main checking account — the Treasury General Account, or TGA — new dollars enter the system and lift risky assets.
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When the Treasury later refills the TGA, by selling the debt, money is withdrawn and stock and crypto are under pressure again, said he.
Hayes points to 2023 as a clear example, when a large pool of funds at the Fed’s reverse repo facility — about $2.5 trillion — was available to be drawn back into markets.
The Market and Recent Movements
The price movement is a good indicator for traders. Bitcoin’s recent drop to the $80,000 range followed a period of reduced liquidity. The rebound above $91,000 is making many investors wonder if the fall marked a low in the cycle.
In the past 24 hours, crypto markets gained some ground. Total capitalization rose to $3 trillion. Bitcoin The total jumped to $92,120. This represents a 1.50 % increase in one day, and 6.5 % over the past week.
Ethereum was trading at $3,160 following a daily increase of 4% and a weekly rise of 11%. These moves are a result of traders watching big dollar flows linked to US Treasury Operations and Central Bank balance sheet movements, according to reports.
The last-day gains are smaller than the weekly returns of several popular tokens. This shows that there is still a wide range in swings but also that buyers have returned.
How 2025 will be Different
Hayes believes that based on recent reports, 2025 won’t be the same as it was in 2023. Reverse repo balances, which fueled the initial rally, are mostly gone. Liquidity tightened up by nearly $1 trillion from July to late 2025 due to the Fed’s quantitative tightening and Treasury issuing debt.
The lack of cash available was an obstacle for the risk assets. It also pushed down prices. Simple mechanics: less money chasing assets leads to reduced bids, and a wider range of price declines.
Price Reactions and Market Effects
Crypto is not the only story of liquidity. Stocks, property, and gold all responded to similar flow changes during the previous cycle.
Hayes believes that approximately $2.5 trillion in liquidity from Fed facility was transferred into the market by 2023. This increased gains across all asset classes. The selling pressure and volatility increased when this source disappeared in 2025.
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The market is in a favorable condition
Hayes believes the climate has changed in a good way. Hayes says the environment has changed in a positive way.
He sees the decline towards $80,000 as a low cycle and anticipates that upward pressure will increase as soon as cash condition improves. According to his opinion, the combination of these factors creates a favorable environment for renewed upward pressure.
Chart from TradingView, image from Unsplash
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Source: www.newsbtc.com
