BitMEX co-founder Arthur Hayes believes one catalyst could re-ignite bullish momentum for the cryptocurrency market.
Hayes tells his 502,700 followers on the social media platform X that more liquidity could soon flood the markets, boosting risk-on assets like crypto.
He is referring to the expected May 1st quarterly refinancing announcement (QRA) from U.S. Treasury Secretary Janet Yellen. Hayes details some possible fiscal decisions Yellen could make that he believes would re-accelerate the crypto market.
“As expected tax receipts added roughly $200 billion to U.S. Treasury General Account (TGA). Forget about the May Fed meeting the 2Q 2024. Refunding announcement comes out next week. What games will Yellen play, here are some options:
1. Stop issuing treasuries by running down the TGA to zero, that is a $1 trillion injection of liquidity.
2. Shift more borrowing to T-bills, which removes money from RRP (reverse repurchase agreement), that is a $400 billion injection of liquidity.
3. Combo of 1 and 2, issue no long term bonds, only bills and run down TGA and RRP at the same time, that is a $1.4 trillion injection of liquidity.
Hayes then says that The Fed is irrelevant and that investors can expect a stock and crypto rally if any of the three scenarios occur.
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