Bitcoin soars to $100k as Treasury Drives Liquidity, not Fed

Arthur Hayes, the co-founder of BitMEX and principal of Maelstrom Capital, contends that the US Treasury—rather than the Federal Reserve—is the true engine of the current bull market in risk assets, Bitcoin foremost among them. In a one-onone live streamed interview interview Hayes said that Wednesday evening traders should be able to get a fair price. “ignore Powell” Instead, parse each word and every data table in the Treasury’s quarterly announcement of refunds.

“Powell hasn’t really mattered for many years,” Hayes disagreed, rejecting the Fed’s chair decision to keep the federal funds rate between 4.25 and 4.50 percent for the third time in a row. “The real show is at the Treasury Department. […] Listen to Bessent. Ignore Powell. He’s irrelevant.”

Hayes’s thesis is based on a dynamic of liquidity that emerged in the third quarter 2022. He claimed that Janet Yellen – then the Treasury Secretary – had spotted two-and-ahalf trillions of dollars worth of surplus money in banks. Fed’s reverse repo This “facility”, according to Hayes, sucked dormant cash out of the Fed and moved issuance towards short-dated Treasury notes. Hayes’s calculations showed that the Fed was able to withdraw dormant money through this move. “injected it into the global money markets,” seeding a broad rally that lifted equities, bonds, gold and—most forcefully—crypto. “Powell didn’t matter in 2022 under a Democratic regime,” “He said” “He doesn’t matter today under the Republican regime.”

Read Related Articles

Hayes sees the newly-minted authority of Treasury Secretary Scott Bessent to conduct buybacks as the next catalyst. Buybacks allow Treasury to recycle the securities that are on-the run, and absorb supply shocks while not forcing the Fed expand their balance sheet. “Bessent has tools,” Hayes noted, citing an April 11–12 Bloomberg appearance. “Powell will sit back and say ‘I’m going to look at data,’ but he’s a sideshow.”

Bitcoin Macro Logic

Hayes simplifies the trade implications down to one variable, the amount of fiat dollar in circulation. “If there is a bigger quantity of fiat dollars in the world than there were yesterday, Bitcoin and crypto will do well,” He said. He said. US Dollar Index (DXY) Secondary is secondary. “Bitcoin doesn’t care. All we care about is: Is there more dollars in the system today than yesterday?”
This framework is the basis for his long-term forecast of Bitcoin can reach $1 million The target is 2028. The target is deliberately round—”We’re humans, we’re dumb, let’s just pick a round number that’s big”—yet Hayes grounds it in compounding fiscal pressures.

Read Related Articles

The Treasury Borrowing Advisory Committee’s most recent presentation showed that interest payments on US debt were the line item with the highest growth rate. He argued that Social Security and Medicare costs as well as defense expenses will increase borrowing. “There’s just no way the US government is going to stop spending money,” He added that he was expecting “an acceleration of money printing and fiscal debasement” Powell’s tenure will expire in May 2026.

Asked how he is allocating capital, Hayes said about 60%–65% of his liquid portfolio is in Bitcoin, 20% in Ether, with the remainder in a handful of what he called “quality shitcoins.” He highlighted three projects—Pendle, EtherFi and Ethena—as examples of what he calls “fundamental season,” Protocols that produce real revenue, and then share this with token holders.

He added that the timing of an expanded rotation to altcoins will be determined by Bitcoin’s dominance. “I think we need to get above 70% before we start seeing a rotation back into alts,” a threshold he tentatively places in the $110,000–$150,000 BTC price range.

Hayes was sceptical that the US–China tariff confrontation The bilateral trade deficit will be significantly reduced. The two sides must work together, said he. “face-saving announcement” For domestic audiences but will continue to import Chinese goods whether through third-country or directly. Over time, he expects Washington to rely less on tariffs and more on capital-account measures—such as user fees on Treasuries held by foreigners—to re-engineer trade flows without asking US consumers to “buy less stuff.”

In his model, a weaker dollar is the by-product, and not an intended goal. “If foreigners sell less things in dollars and those dollars are not invested in the financial markets, the dollar will go down in value,” He said. Again, this feeds Bitcoin’s bid.

BTC was trading at $98.827 as of the time this article went to press.

Featured image was created with DALL.E chart by TradingView.com