TLDR:
- Arthur Hayes warns Bitcoin faces turbulence as U.S. liquidity tightens before “stealth QE.”
- Hayes says Treasury cash hoarding is draining markets until government spending resumes.
- He predicts the Fed’s repo facility will quietly expand liquidity in coming months.
- “Stealth QE,” Hayes adds, could trigger Bitcoin’s next major bull cycle.
Markets are entering another turbulent phase, and Arthur Hayes believes it’s far from over. The BitMEX co-founder, known for his macro insights, warns that crypto traders should brace for pain before the U.S. quietly reopens the money taps.
In his latest essay, Hayes explains that U.S. liquidity is shrinking as Treasury borrowing absorbs cash from the system. He expects this squeeze to pressure Bitcoin until Washington restarts government spending.
Liquidity Tightens as Treasury Drains the Market
Hayes wrote that the Treasury’s General Account now holds about $150 billion more than its $850 billion target. That excess cash, he says, effectively removes liquidity that would otherwise circulate through markets.
According to Hayes, the ongoing government shutdown and limited fiscal outflows are delaying a liquidity rebound.He cautioned that these conditions will cause volatility and possible false breakouts in Bitcoin’s price.
Hayes urged traders to conserve capital and avoid chasing rallies until the liquidity backdrop improves. He compared the situation to previous market phases when investors mistook short-term weakness for a sustained downturn.
“Stealth QE” Could Ignite the Next Bitcoin Bull Run
Once the government reopens, Hayes expects “stealth QE” to quietly restore liquidity through the Federal Reserve’s Standing Repo Facility (SRF).
He explained that as Treasury issuance grows, hedge funds financing those purchases will increasingly rely on repo lending from the Fed. That process expands the Fed’s balance sheet, effectively injecting new dollars into the system.
Hayes believes this mechanism, though indirect, will mark the beginning of renewed liquidity inflows. He argues that when the SRF balance rises, BTC typically benefits as dollar liquidity returns to risk assets.
In his view, this hidden form of quantitative easing will set the stage for the next crypto bull market.Hayes concluded that patient investors stand to benefit most once liquidity normalizes. He warned that short-term pessimism could lead traders to miss the early stages of Bitcoin’s next rally.
The post Arthur Hayes: Bitcoin Faces Pain Before U.S. “Stealth QE” Rescues Markets appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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