Treasury Buybacks Spark New Bitcoin Bull Market, Says BitMEX Co-Founder

Arthur Hayes, co-founder of BitMEX and Maelstrom Chief Investment Officer, believes that the US Treasury's expanded bond buyback program has marked the start of a new Bitcoin bull market. He published an essay arguing that by buying up older, longer-dated Treasury securities, their prices will rise, making risk assets like Bitcoin more attractive.

The Treasury is doubling its maximum long-bond buyback size to at least $4 billion per operation starting September 9th and continuing until November 4th. This plan authorizes $38 billion for liquidity-support purchases and $25 billion for short-maturity cash-management buybacks during the quarter.

Hayes points out that this will reduce yields on Treasury securities, making Bitcoin, with its relatively high returns, more appealing to investors. The 10-year Treasury yield has declined to around 4.65%, and the 30-year moved closer to 5.20%.

Hayes also notes that recent Bitcoin price movements have coincided with $517 million in Bitcoin ETF net inflows, adding another source of buying pressure on top of the macro narrative.