Bitcoin bull market underway, Arthur Hayes says

Bitcoin traded above $80,000 on Aug. 25 as BitMEX co-founder Arthur Hayes argued that expanded U.S. Treasury bond buybacks marked the beginning of a new bull market.

Hayes presented the argument in his Aug. 25 essay, Same Same But Different. He linked Bitcoin’s recent rally to Treasury Secretary Scott Bessent’s decision to increase purchases of longer-dated government securities.

The Treasury confirmed on Aug. 19 that it would at least double the maximum size of certain long-end liquidity-support buybacks. The limit will rise from $2 billion to at least $4 billion per operation between Sept. 9 and Nov. 4.

Hayes described the move as a mechanism for adding dollar liquidity and reducing pressure on long-term yields. However, the Treasury says the program supports market liquidity rather than providing monetary stimulus.

Bitcoin rally follows Treasury buyback announcement

Bitcoin rose from below $65,000 before the announcement to above $80,000 on Aug. 25. The cryptocurrency reached an intraday high above $81,000, extending its strongest weekly advance in months.

The timing supports Hayes’s argument that expectations of easier financial conditions benefited Bitcoin. It does not establish that the buyback announcement caused the entire rally. ETF inflows, short liquidations and a weaker dollar also contributed to the move.

U.S. spot Bitcoin ETFs recorded about $517 million in net inflows on Aug. 19, their strongest daily intake since early May. Derivatives liquidations then accelerated the breakout, as Bitcoin surged above $71,000 following the Treasury announcement.

The 10-year Treasury yield initially declined toward 4.65%, while the 30-year yield moved closer to 5.20%. Yields subsequently recovered part of that decline, suggesting the announced purchase sizes had not fundamentally changed the market’s concerns over borrowing and debt supply.

No purchases under the enlarged limits had occurred when Hayes published his essay. The new schedule begins in September.

Hayes calls buybacks a source of dollar liquidity

Hayes argued that purchasing older, longer-dated securities could raise their prices and suppress yields. In his view, lower yields make risk assets comparatively more attractive and encourage capital to move toward Bitcoin.

He compared Bessent’s approach with former Treasury Secretary Janet Yellen’s increased reliance on Treasury bills in late 2023. Hayes believes that strategy helped move money-market balances out of the Federal Reserve’s overnight reverse-repurchase facility and into marketable securities.

“The next bull market… just began,” Hayes claimed, although Treasury buybacks are debt-management operations and not equivalent to Federal Reserve quantitative easing.

Treasury describes its buybacks as a way to improve liquidity in older securities and manage its cash position. Its Aug. 5 refunding statement authorized up to $38 billion of liquidity-support purchases during the quarter, alongside up to $25 billion of short-maturity cash-management buybacks, according to the department’s statement.

The New York Fed is separately conducting about $10 billion of reserve-management purchases during its current monthly operating period. The central bank says those purchases maintain ample reserves in the banking system. They are not part of Treasury’s buyback program.

Hayes has previously argued that an expanded Federal Reserve facility for foreign monetary authorities could also support Bitcoin by temporarily increasing dollar liquidity.

A $1 trillion TGA deployment remains unconfirmed

Hayes identified the Treasury General Account as another possible source of buying power. The account held approximately $940 billion, according to reports citing Treasury officials.

Bessent said the Treasury could use some of that cash for bond buybacks without changing its scheduled long-term debt auctions. However, the government has not announced a plan to deploy the entire balance or committed $1 trillion to purchases.

Hayes called a large TGA drawdown the “middle road,” but the scale and timing remain speculative.

Treasury’s latest borrowing estimate assumes a $950 billion cash balance at the end of September and $850 billion at year-end. It expects to borrow $739 billion in privately held net marketable debt during the July-to-September quarter and another $628 billion during the following quarter, according to an official release.

Using the TGA extensively could temporarily place more cash in the private banking system. Its longer-term effect would depend on how quickly Treasury rebuilt the account through new debt issuance.

Hayes expects higher Bitcoin volatility

Hayes said Maelstrom had moved to “maximum risk,” with major exposure to Bitcoin, Ether, Ethena and Ether.fi. He did not disclose position sizes or provide independently verifiable portfolio records.

He also warned that a continued advance would not prevent steep corrections. His view remains a market forecast rather than a guaranteed outcome, and the announced Treasury operations remain small relative to the broader Treasury market.

The next confirmed policy milestone is Sept. 9, when the larger long-end buyback limits take effect. Treasury will reconsider future purchase sizes during its next quarterly refunding on Nov. 4.

Investors can then compare actual buyback results, Treasury yields, the TGA balance and Bitcoin’s performance. Until those data arrive, Hayes’s bull-market call rests on an expected liquidity transmission mechanism rather than a confirmed policy commitment to monetary easing.