Arthur Hayes Says Bitcoin Bull Run Has Begun as Liquidity Improves

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The rally revived a familiar argument from Arthur Hayes. The former BitMEX chief executive, who now runs the crypto investment fund Maelstrom, wrote on Aug. 25 that Treasury Secretary Scott Bessent is running the same playbook his predecessor, Janet Yellen, used in 2023: shifting how the government finances its debt in a way that pushes dollar liquidity into markets, and eventually into Bitcoin.

“Bitcoin is the global liquidity smoke alarm,” Hayes wrote.

Arguing the rally would continue regardless of how fast Bessent moves.

Bitcoin reclaimed $80,000 on Aug. 25, its highest level in three months, six days after the Treasury Department said it would raise the size of its long-bond buyback operations to at least $4 billion per operation, up from $2 billion.

The Six Days Since Aug. 19

• Aug. 19: Treasury raises its buyback cap to at least $4 billion per operation, effective Sept. 9.
• Aug. 19–20: Spot Bitcoin ETFs post $517 million in net inflows, the largest in three and a half months.
• Aug. 20–21: About $1.14 billion in crypto shorts are liquidated within an hour; betting markets price an 85%.
• Aug. 25: Bitcoin reclaimed $80,000; Hayes publishes the essay calling it the start of a new bull market.

Treasury itself describes the buybacks as routine debt management, in which it retires older bonds using proceeds from new debt sales, not as an attempt to stimulate markets the way the Federal Reserve’s own bond-buying programs did.

The Same Analogy, an Emptier Buffer

Hayes’s comparison to 2023 is more specific than it first sounds, and it is checkable. That year, Yellen’s Treasury quietly shifted its financing toward short-term bills rather than longer bonds, a move a Hudson Bay Capital research paper later named “Activist Treasury Issuance.” At its peak, bills made up as much as 60% of new issuance, against a typical 15% to 20%.

Money-market funds bought those bills largely by pulling cash out of the Fed’s overnight reverse repo facility, which held a record $2.55 trillion as of Dec. 30, 2022, according to Federal Reserve data. That drawdown released cash into the financial system without shrinking bank reserves, which is why Hayes and others have described 2023’s issuance shift as liquidity-positive for risk assets.

That buffer is no longer there to draw on, as the numbers above show. If Treasury funds this round of buybacks the same way, through new bill sales, money-market funds no longer have a multi-trillion-dollar cushion at the Fed to draw down first. The cash is more likely to come directly out of bank reserves or the roughly $1 trillion sitting in Treasury’s own general account, a tighter and more reserve-sensitive path than the one that ran through 2023.

Why Hayes’s Own History Is Worth Weighing Here

Hayes has made a version of this call repeatedly over the past year, declaring a new bull run underway or the market’s four-year cycle over on several separate occasions. A review of 20 of his recent market calls found only two proved accurate, including a wrong call that Bitcoin would fall under $50,000 in September 2024 and a wrong call that it would reach $110,000 in March 2025.

He also has a direct financial stake in the outcome. Maelstrom, the fund he runs, holds crypto positions that benefit when Bitcoin rallies, the same rallies his essays argue for.

What Would Confirm or Break the Liquidity Read

• Bank reserves fall noticeably once the Sept. 9 buyback operations begin: supports Hayes’s liquidity-injection reading.
• The operations pass without new stress in short-term funding markets: undercuts the comparison to 2023, when the RRP drawdown absorbed that strain instead.
• The reverse repo facility ticks up again, even slightly: would suggest money funds still have some room left, partly reviving the analogy.

Treasury’s expanded buybacks begin Sept. 9 and run through Nov. 4. That window, more than Hayes’s essay, is where his mechanism claim gets tested against actual reserve and funding-market data.