Bessent's Bond Buybacks Spark Bitcoin Rally

Arthur Hayes believes that Treasury Secretary Scott Bessent is following in Janet Yellen's footsteps by injecting dollar liquidity into the market without calling it money printing. According to Hayes, both Yellen and Bessent faced the same problem: a 10-year Treasury yield approaching 5% that makes mortgages, corporate debt, and consumer financing prohibitively expensive.

Hayes points out that when Yellen flooded the market with T-bills in late 2023, pulling $2.4 trillion out of the Fed's Reverse Repo Program into the banking system, Bitcoin rallied hard off its FTX lows directly after that injection.

Similarly, Bessent is doubling long-end bond buybacks while the Fed's Reserves Management Program quietly prints money to absorb T-bill issuance on the other side. Hayes argues that this move, although criticized by some in the market, is actually bullish for Bitcoin.