Bessent's Money Printing Playbook Targets BTC Price Surge

Arthur Hayes, BitMEX co-founder and Maelstrom chief investment officer, suggests that Treasury Secretary Scott Bessent is following a similar money-printing strategy as former Secretary Janet Yellen in 2023. According to Hayes, this policy involves shifting bond issuance towards short-term bills, which would draw down the Fed's reverse repo facility.

This move drained $2.5 trillion from the facility to around $100 billion between mid-2023 and January 2025, when Bessent took over. The cash that flowed into bank reserves allegedly contributed to Bitcoin's price surge during this period. Hayes argues that if Bessent repeats Yellen's playbook, it could lead to a significant increase in Bitcoin's price.

Bessent has already doubled long-term bond buyback operations to $4 billion per operation this month. Officials are also considering tapping the roughly $950 billion Treasury General Account (TGA) to fund even larger purchases. This move pushed Bitcoin's price briefly to $80,000 before it dropped back to around $78,800.

Hayes uses a mathematical model based on Yellen's 2023-2024 rally to predict that Bitcoin could reach a target of around $224,000 if Bessent's policy is successful. However, this calculation has some caveats, as the 2023-2024 rally was driven by multiple factors beyond Treasury issuance mechanics.

Citadel Securities has expressed concerns about Bessent's buyback strategy, warning that it could lead to financial repression and weaken the dollar, potentially stoking inflation. The success of Bessent's policy in driving up Bitcoin's price remains uncertain, with its ability to hold up against previous attempts still to be proven.