Will US Treasury bond buybacks push Bitcoin to $200,000? Arthur Hayes answers

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The US Treasury bond buyback will inject new liquidity into the market.
As bond yields fall, investors are looking for higher yields in cryptocurrencies, especially Bitcoin.
Arthur Hayes says this liquidity flow could push BTC’s price to $110,000 and then $200,000.
Arthur Hayes, co-founder of BitMEX, believes that the US Treasury bond buyback plan could inject a lot of liquidity into the market and push Bitcoin’s price to $110,000 or even $200,000.

In an article he published on Substack on April 23, Hayes mentioned the Treasury’s plan to issue new debt to buy back older, less traded bonds. These bonds, called “off-the-run,” are less traded, so buying them back could smooth out the bond market and create arbitrage opportunities for institutional investors.

Hayes says Treasury Secretary Scott Besant is likely to rely more on bond issuance and redemptions to maintain market stability as the U.S. budget deficit grows and tax revenues fall. He says the mechanism works like quantitative easing (QE), a strategy central banks use to increase the money supply and stimulate the economy.

Except this time, the U.S. Treasury, not the Federal Reserve, is easing liquidity conditions. He argues that by lowering yields on older bonds, investors are encouraged to seek higher returns in riskier assets like cryptocurrencies.


At the same time, when the bond market is less volatile, investors are more comfortable borrowing money to make larger trades. This additional purchasing power can increase the volatility of risky assets like Bitcoin, and prices can rise more quickly when markets are bullish.

Hayes notes the similarity of this pattern to late 2022, when Bitcoin’s strong rally took advantage of increased market liquidity. He believes that most investors have been too focused on the likely timing of the Federal Reserve’s rate cut and have forgotten that the central bank has already slowed down its “quantitative easing”—in effect, it has been easing in secret.

Hayes predicts that if the liquidity flow continues, Bitcoin could reach $110,000 and then move toward $200,000. Once BTC breaks that level, altcoins may also experience a bigger jump as investors shift to riskier assets.


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