Arthur Hayes, the co-founder of the BitMEX platform, predicts that the price of Bitcoin may experience a significant jump that could raise its value to $110,000, and possibly even to $200,000, due to anticipated liquidity flows resulting from a new plan by the U.S. Treasury to repurchase bonds.
In an analytical article published on the Substack platform on April 23, Hayes pointed out that the U.S. Treasury is preparing to launch a plan aimed at issuing new debt to repurchase old Treasury bonds that are known to have low liquidity in the markets. This step aims to reduce volatility in the bond market and create arbitrage opportunities for institutional investors, which could translate into massive financial flows in the financial markets.
Hayes considers this policy to be similar in effect to quantitative easing, but this time it does not originate from the Federal Reserve, but from the Treasury. With the increasing deficit in the U.S. budget and declining tax revenues, it is likely that the Treasury will increasingly resort to this mechanism to support financial stability.
How does the plan affect Bitcoin? Hayes believes that the bond repurchase will lead to lower yields on long-term bonds, which will drive investors to seek higher returns in higher-risk assets such as cryptocurrencies, with Bitcoin at the forefront. Additionally, the decrease in bond market volatility enhances investor appetite for leverage, meaning more liquidity will enter the digital markets.
Hayes pointed out that this scenario is similar to what happened in late 2022 when abundant liquidity helped push the price of Bitcoin to significant highs. He added that markets today are overly focused on the timing of interest rate cuts by the Federal Reserve, while the tightening of monetary policy has already begun to recede behind the scenes.
Bullish outlook for Bitcoin and altcoins With continued liquidity flow, Hayes expects the price of Bitcoin to first rise to $110,000, and possibly later to $200,000. He also noted that this potential rise will pave the way for a larger bullish wave in the altcoin market, as investors' attention will shift to higher-risk assets after Bitcoin surpasses key resistance levels.
