What if the next crypto bull run isn’t led by a halving or a killer app—but by Washington’s own liquidity firehose? BitMEX co-founder Arthur Hayes says an aggressive U.S. policy mix—Treasury bond buybacks, fiscal stimulus, and potential yield curve control—could force capital into Bitcoin and risk assets. If that playbook shows up, the market’s path of least resistance may be higher—and faster—than most are positioned for.

What’s happening

Hayes argues that U.S. Treasury buybacks combined with easier fiscal policy and even Fed YCC would inject liquidity that needs a home. Historically, when the Fed expands its balance sheet or suppresses yields, money chases beta—crypto included. Signals from policy advisors and refunding announcements are now pivotal catalysts that could front-run a new liquidity cycle.

Why this matters to traders

Liquidity drives multiples. In prior QE periods, Bitcoin and majors rallied as real yields fell and the dollar softened. If policy tilts toward easing in 2025–2026, crypto could see a multi-leg cycle: BTC first, then ETH, then high-beta alts. But misreading the timeline—or ignoring risks like inflation flare-ups—can be costly.

Key indicators to watch

• U.S. Treasury announcements: buyback schedules, quarterly refunding size/tenor mix.
• Fed stance: balance sheet changes, hints of yield curve control, policy minutes.
• Liquidity gauges: TGA balance, RRP usage, bank reserves, DXY, and real yields.
• Crypto internals: stablecoin net issuance, spot ETF flows, BTC dominance, perp funding and basis.
• Event calendar: CPI/PCE prints, FOMC, Treasury refunding, major fiscal bills.

Opportunities on the table

• Position with the curve: Accumulate BTC on liquidity-friendly dips when DXY eases and real yields fall; rotate to ETH and quality L1s/L2s as breadth improves.
• Options for asymmetry: Use call spreads into policy events; finance with put spreads to cap downside.
• Basis & carry: In easing regimes, futures basis can expand—capture with hedged cash-and-carry.
• Trend confirmation: Wait for stablecoin growth + positive ETF inflows + falling real yields before sizing up.

Risks and invalidation

• Policy stalls or reverses: No buybacks, tighter fiscal, or higher-for-longer inflation keeps liquidity tight.
• Event shocks: Regulatory actions, miner stress, or risk-off macro can trigger sharp drawdowns.
• Liquidity mirage: TGA rebuilds or RRP drains can offset easing—watch net liquidity, not headlines.

A simple, actionable edge

Build a weekly Liquidity Dashboard and tie position size to it:

• Bullish: Falling real yields, rising bank reserves, growing stablecoins, positive ETF flows → increase exposure.
• Neutral: Mixed signals → stay core BTC/ETH, use options for convexity.
• Bearish: Rising real yields/DXY, shrinking reserves, negative flows → cut risk, raise cash/hedges.

Bottom line

If the U.S. opens the liquidity spigot with buybacks and curve control, crypto’s next impulse could be powerful. Prepare your framework now—so when the signals flip, you execute, not chase.

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