Treasury Buybacks Fuel Bitcoin Bull Market
Bitcoin's price surge to above $80,000 is attributed by Arthur Hayes, co-founder of BitMEX, to the US Treasury's expanded bond buyback program. The increased buyback limits, announced on August 19, will allow for at least $4 billion per operation starting September 9.
Hayes argues that buying older bonds pushes their prices up and yields down, making assets like Bitcoin more attractive to investors. He draws a parallel with former Treasury Secretary Janet Yellen's actions in December 2023, which pulled money out of the Federal Reserve's Reverse Repo Program and led to gains in both Bitcoin and the Nasdaq 100.
Hayes expects a similar pattern now, but notes that the current buyback size is still too small to move a $40 trillion debt market on its own. He has shifted his fund, Maelstrom, to maximum risk exposure in Bitcoin and Ether, with a target price of $126,000 by the end of 2026.