- Hayes says heavy U.S. Treasury issuance combined with tight liquidity and rising SOFR, may force the Fed into “stealth QE”
- He argues balance-sheet expansion, not halving cycles, is what historically lifts Bitcoin.
- If stealth liquidity hits via SRF or repos, BTC could front-run the next macro easing wave.
Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, published a new essay arguing that the next Bitcoin bull run will be driven by U.S. dollar liquidity rather than from the halving.
The Maelstrom CIO identifies this catalyst as “stealth QE” or “Invisible QE.” This is his term for covert monetary policy easing from the US Federal Reserve. His core thesis is that Bitcoin’s price is not just tied to its own code, but directly to the expansion of the Fed’s balance sheet.
Related: Crypto Analyst Explains the Potential Effect of Quantitative Tightening on the Crypto Market
What Is the ‘Stealth QE’ Mechanism Adopted by the Fed?
Hayes suggests that heavy Treasury bond issuance (around $2 trillion annually), combined with tight liquidity and rising SOFR (Secured Overnight Financing Rate), may force the Fed into injecting liquidity via the Standing Repo Facility (SRF). He argues that this acts as de facto QE, where the Fed provides cash to support the bond market, and the extra money that gets created eventually finds its way into risk-on assets like bitcoin.
Furthermore, Hayes warns that recent selling pressure from big institutions has already hurt crypto prices. However, he sees this as the quiet period before a big surge, predicting that the next major bull market will start when the Fed begins officially pumping “new money” into the financial system again.
Why Liquidity Is the Real Catalyst, Not the Halving
This “invisible QE” thesis is critical for the crypto market. If invisible QE kicks in, global dollar liquidity rises, which is a classic scenario where Bitcoin tends to perform very well. Hayes says that the biggest crypto bull markets are timed with these injections of cash into the economy, more so than with Bitcoin’s pre-programmed supply reductions every four years.
Interestingly, several weeks ago, some analysts shared the view that a restart of QE would be one of the biggest bullish catalysts for crypto.
Also, during periods of high Treasury issuance and tight bank reserves, the Fed has historically stepped in to avoid market stress, which indirectly supports the invisible QE thesis.
In the end, as Hayes puts it, for Bitcoin and crypto, the next major price surge might not come from its built-in supply cut, but from decisions made by the US Treasury and Fed. Considering the Fed’s cautious stance on future interest rate cuts, government borrowing, and high interest rates, Hayes’ stance seems plausible. We’ll likely see soon enough whether it turns out to be true.
Related: Jerome Powell Signals Quantitative Tightening Will End In Coming Months
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