Arthur Hayes on Treasury Levels: Will $850 Billion Change Everything?

Arthur Hayes believes crypto 'up only' mode triggers when the U.S. Treasury hits $850B. But does Treasury liquidity really dictate crypto's fate?

Arthur Hayes on Treasury Levels: Will $850 Billion Change Everything?

Arthur Hayes, BitMEX co-founder, thinks an $850 billion U.S. Treasury balance is crypto's magic number. Will it really change everything?

Hayes's $850 Billion Thesis

Hayes argues that when the U.S. Treasury's General Account (TGA) hits $850 billion, it signals the start of a sustained crypto bull run. He sees the Treasury's liquidity accumulation as a temporary drain on capital, followed by an influx that will boost risky assets like crypto.

The Counter-Argument

Not everyone buys into Hayes's theory. André Dragosch from Bitwise Asset Management calls the correlation between liquidity and Bitcoin "weak and misleading." He argues that crypto's dynamics are far more complex, influenced by investor sentiment, institutional flows, and regulations, not just Treasury levels.

Rate Cuts and Market Reactions

The Federal Reserve recently cut interest rates, the first cut since 2024. The market reaction wasn't straightforward. Some analysts, like Nic Puckrin from Coin Bureau, suggest the rate cut was already priced in. The Fed itself seems divided on future cuts, adding another layer of uncertainty.

Personal Take

Hayes's idea is interesting, but to say that the Treasury hitting a specific level will unilaterally change everything is an oversimplification. Crypto's influenced by many factors. Hayes's framework is useful for understanding potential liquidity shifts, but it shouldn't be the only factor you look at.

Final Thoughts

Will $850 billion in the Treasury trigger a crypto revolution? Maybe, maybe not. But hey, it's fun to speculate, right? Keep an eye on that TGA balance – and maybe a four-leaf clover just in case!