BitMEX co-founder Arthur Hayes says Bitcoin has entered a new bull-market phase, arguing that the U.S. Treasury’s decision to expand purchases of long-dated government debt is increasing financial-system liquidity and creating favorable conditions for scarce assets.
Hayes linked his outlook to the Treasury’s decision to at least double the maximum size of its long-end liquidity-support buybacks, from $2 billion to $4 billion per operation beginning September 9. The announcement helped trigger a sharp decline in longer-term Treasury yields and coincided with Bitcoin’s rapid recovery from the mid-$60,000 range.
Bitcoin subsequently climbed toward $80,000, reaching approximately $79,958 during the latest advance. BTC has gained more than 20% from levels around $64,000 reached before the Treasury-driven rally began.
Hayes argues that Bitcoin should be among the earliest beneficiaries if the policy evolves into a sustained source of dollar liquidity.
Hayes Sees Echoes of Yellen-Era Liquidity Expansion
Hayes compared Treasury Secretary Scott Bessent’s approach with policies under former Treasury Secretary Janet Yellen, whose debt-management decisions he has previously argued helped increase liquidity available to financial markets.
His thesis centers on how Treasury operations affect the amount and location of dollars in the financial system rather than on the mechanical reduction of government debt.
Treasury buybacks involve purchasing older government securities, potentially improving liquidity in less actively traded portions of the Treasury market. The latest expansion specifically targets longer-duration securities as policymakers confront elevated borrowing costs and unusually high long-term yields.
The Treasury’s move includes at least $4 billion across eight scheduled operations, with the overall increase estimated at approximately $14 billion. Hayes believes those operations could become considerably more important if expanded further or financed in ways that draw down the Treasury General Account, effectively returning government-held cash to the private financial system.
That distinction matters because the currently announced buybacks remain small relative to the approximately $40 trillion U.S. government debt market.
MarketWatch reported that some bond-market participants view the program as too limited to fundamentally suppress long-term yields, with the 30-year Treasury yield still around 5.24% and the 10-year yield near 4.71%.
Bitcoin Becomes Hayes’ Preferred Liquidity Trade
Hayes nevertheless views the direction of policy as more important than the initial size. He has argued that investors avoiding Bitcoin, gold and equities as authorities respond to stresses in government bond markets risk missing an emerging liquidity cycle.
Bitcoin’s immediate market reaction strengthens that argument, although it does not establish that Treasury policy alone caused the rally.
The cryptocurrency initially surged roughly 8.7% toward $69,750 after the buyback expansion became public. The move then accelerated as leveraged bearish positions were forced out of the market, with more than $4 billion of crypto shorts ultimately liquidated during the rally.
Regulatory developments and ETF demand provided additional catalysts, making it difficult to isolate the impact of Treasury liquidity from the broader improvement in crypto sentiment.
Hayes’ longer-term argument is that the fiscal backdrop makes additional intervention increasingly likely. U.S. federal debt has reached approximately $40 trillion, while higher interest rates are pushing annual government interest expenses above $1 trillion.
If policymakers increasingly respond to those pressures by injecting liquidity or suppressing longer-term borrowing costs, Hayes expects monetary assets such as Bitcoin and gold to benefit from concerns about currency debasement.
He has reportedly maintained a Bitcoin target of approximately $126,000 by the end of 2026, implying substantial additional upside even after the latest rally. The principal risk to that thesis is that Treasury buybacks remain primarily a market-functioning tool rather than developing into the broader liquidity operation Hayes anticipates.
For now, however, Bitcoin’s move from roughly $64,000 toward $80,000 has given his liquidity framework an immediate market test. Whether it develops into the sustained bull market Hayes expects will depend on whether Treasury intervention continues expanding after the current buyback schedule begins in September.