Treasury Buyback Boosts Bitcoin to $80,000, Bull Market Underway, Says Arthur Hayes

Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, believes that the recent Treasury announcement has marked the beginning of a new bull market for Bitcoin. On August 25, Bitcoin traded above $80,000 as the cryptocurrency's price surged following the news that U.S. Treasury Secretary Scott Bessent had increased purchases of longer-dated government securities.

The expanded Treasury buyback program, which will see at least double the maximum size of certain long-end liquidity-support buybacks, was announced on August 19. According to Hayes, this move is a mechanism for adding dollar liquidity and reducing pressure on long-term yields.

However, it's worth noting that while Treasury describes its buybacks as a way to improve liquidity in older securities and manage its cash position, not everyone agrees with Hayes' assessment. The New York Fed is separately conducting about $10 billion of reserve-management purchases during its current monthly operating period, which maintains ample reserves in the banking system.

Hayes has previously argued that an expanded Federal Reserve facility for foreign monetary authorities could also support Bitcoin by temporarily increasing dollar liquidity. He also identified the Treasury General Account as another possible source of buying power, with a balance of approximately $940 billion.