Arthur Hayes, co-founder of BitMEX, claims the US Treasury is the main force driving the current Bitcoin surge, not the Federal Reserve. He suggests traders ignore Fed Chair Powell and focus on Treasury policies. Hayes sees liquidity changes as key, attributing recent market movements to Treasury actions that increase dollars in circulation, which he believes will support Bitcoin’s rise toward his $1 million prediction by 2028. Currently, Bitcoin trades near $98,827.
Bitcoin has seen impressive growth recently, edging closer to the $100,000 mark, and some experts say the US Treasury—not the Federal Reserve—is driving this surge. Arthur Hayes, co-founder of BitMEX, made these claims during a live-streamed interview on Wednesday. He advised traders to focus their attention on the Treasury’s activities rather than the Fed, questioning the relevance of Fed chair Jerome Powell’s decisions.
Hayes dismissed Powell’s influence, stating that the Fed’s decision to keep the federal funds rate at 4.25% to 4.50% is largely inconsequential to market movements. Instead, he argued that the real action is happening within the Treasury Department. He encourages traders to pay close attention to Treasury Secretary Scott Bessent’s strategies, suggesting that they are more impactful.
The basis of Hayes’s argument revolves around a liquidity shift that he believes began in the third quarter of 2022. He pointed to Janet Yellen’s then role as Treasury Secretary, when she identified $2.5 trillion parked in the Fed’s reverse repo facility. By transitioning to short-dated Treasury bills, she effectively redirected this dormant capital into the global money markets, creating momentum that favoured various asset classes, particularly Bitcoin and other cryptocurrencies.
Furthermore, Hayes sees Bessent’s authority to conduct securities buybacks as another potential catalyst for market growth. Buybacks would enable the Treasury to manage supply shocks without an explicit increase in the Fed’s balance sheet. While Powell observes the situation, Hayes insists it’s Bessent’s strategies that hold the real power in this bull market.
When considering the factors that influence Bitcoin’s pricing, Hayes believes it all boils down to the amount of fiat currency available. If the quantity of dollars in circulation increases, it bodes well for Bitcoin and crypto markets. He implies that factors like the US Dollar Index or inflation are secondary concerns. This belief underpins his ambitious prediction that Bitcoin could reach $1 million by 2028, a speculative target he suggests arises from the inherent need for the government to continue its spending spree.
According to Hayes, fiscal pressures are expected to grow as interest on the national debt becomes the fastest-rising expenditure item. With programs like Social Security, Medicare, and defence consuming larger portions of the budget, he anticipates greater money printing post-Powell’s term ending in May 2026.
Currently, Hayes has allocated 60%-65% of his liquid portfolio into Bitcoin, with another 20% in Ether and some funds into what he refers to as “quality shitcoins.” He mentioned several promising projects like Pendle, EtherFi, and Ethena, as indicative of a productive season in the crypto space.
Looking towards the altcoin market, he estimates that Bitcoin’s market dominance needs to surpass 70% before meaningful capital starts rotating back into alternative cryptocurrencies, with a price benchmark for Bitcoin around the $110,000 to $150,000 mark as a likely target.
Hayes expressed skepticism towards the impact of the ongoing US-China tariff disputes on the trade deficit. He believes both countries require a “face-saving” solution, but the US will inevitably continue to import goods from China. Moving forward, he suggests that the US government will likely shift from tariffs to alternative measures to control trade flows, especially regarding foreign holdings of Treasuries.
He concludes that a weaker dollar resulting from such measures will merely be an outcome—not a targeted goal. If low investment of dollars in markets persists, the dollar will depreciate, further driving demand for Bitcoin. As of press time, Bitcoin was trading at approximately $98,827.
