Arthur Hayes: "Hidden QE" may be restarted, potentially triggering the next Bitcoin bull market.

Arthur Hayes has published a new lengthy article stating that the operations of the US Treasury and the Federal Reserve are brewing a "stealth QE," which could become a core catalyst for a new round of price increases in Bitcoin and the crypto market. Currently, US government spending continues to expand, and political incentives dictate that they are more inclined to issue bonds than raise taxes. Foreign central banks, due to the risk of confiscation of dollar assets following the Russia-Ukraine war, are more inclined to buy gold than US Treasury bonds. The US private savings rate is insufficient to support Treasury bond issuance, while the four major commercial banks have only absorbed a small portion of new debt. "Relative value (RV) hedge funds" have become marginal buyers of US Treasury bonds, primarily through leveraged financing via repurchase agreements (repo). The US Treasury expects to issue approximately $2 trillion in new debt annually to cover the deficit. When market liquidity is tight and the SOFR (overnight funding rate) exceeds the federal funds limit, the Federal Reserve injects cash directly into the market through the Standing Repo Facility (SRF). This is equivalent to "de facto QE": printing money → lending → supporting the Treasury bond market. As the use of SRF increases, global dollar liquidity increases, effectively equivalent to QE. Hayes predicts this will reignite the bull market cycle for Bitcoin and the crypto market. "BTC rises whenever the Federal Reserve expands its balance sheet." Currently, the US government shutdown and bond auctions are causing short-term liquidity tightening, putting pressure on the crypto market. Hayes advises investors to "preserve capital and wait for the right opportunity," stating that the market will see a strong rebound after the "hidden QE begins."