Hayes Sees 'Money Printing' Opportunity as Treasury Boosts Bond Buybacks

Arthur Hayes, Maelstrom's chief investment officer and BitMEX co-founder, is urging investors to 'back up the truck and buy crypto with both hands.' He believes that the recent expansion of long-end bond buybacks by U.S. Treasury Secretary Scott Bessent could increase dollar liquidity and funnel more money into risk assets, including cryptocurrency.

Hayes argues that this move is a form of 'money printing' similar to what Janet Yellen did in late 2023, which helped support bonds, stocks, and Bitcoin after the FTX collapse. He points out that Bessent's announcement of larger-than-scheduled buybacks starting next month may not be enough to suppress long-term yields, but expects the Treasury to increase buybacks gradually if pressure in the bond market continues.

The best-case scenario for Bitcoin, according to Hayes, would be for the Treasury to signal that it would buy 10-year and longer-dated Treasuries without limit whenever yields rise above 5%, similar to the Bank of Japan's yield-control approach. However, he notes that the more likely scenario is a gradual increase in buybacks until the bond market experiences acute stress.

In the meantime, Bitcoin has already responded positively to Bessent's intervention, with its price rising over 23% since announcing the Treasury buyback policy. Hayes also highlights Ethena (ENA) as an altcoin that could uniquely benefit from this development, citing a lot of upside potential in its price.