Bitcoin moved back above $80,000 on Aug. 25 as BitMEX co-founder Arthur Hayes said a new Bitcoin bull market has started after the U.S. Treasury increased its planned bond buybacks.
Hayes believes the Treasury’s decision to increase purchases of longer-term government bonds could bring more liquidity into markets and support risk assets like Bitcoin.
The Treasury announced that it would increase the maximum size of certain long-term bond buybacks from $2 billion to at least $4 billion per operation starting Sept. 9 and continuing through Nov. 4.
Hayes argued that these purchases could reduce pressure on long-term bond yields and encourage investors to move money into assets like Bitcoin. However, the Treasury has said the program is designed to improve market liquidity and manage debt, not act as economic stimulus.
Bitcoin’s price increased from below $65,000 before the announcement to above $80,000 afterward. The move was also supported by other factors, including strong ETF inflows, short position liquidations, and a weaker U.S. dollar.
U.S. spot Bitcoin ETFs recorded around $517 million in net inflows on Aug. 19, helping increase demand during the rally. At the same time, traders who were betting against Bitcoin were forced to close positions, adding more buying pressure.
Treasury yields initially moved lower after the announcement, with the 10-year yield falling toward 4.65% and the 30-year yield moving closer to 5.20%. However, yields later recovered some of those losses, showing that the bond market’s broader concerns remain.
Hayes said the Treasury’s bond purchases could create a similar effect to other periods when financial conditions became easier. He compared the move with previous Treasury strategies that helped shift money into financial markets.
He described the development as the beginning of another Bitcoin bull cycle, but it is important to note that Treasury buybacks are not the same as Federal Reserve money printing or quantitative easing.
The Treasury has explained that its buybacks are mainly designed to improve liquidity in older government bonds and manage its cash position.
Another area Hayes highlighted is the Treasury General Account (TGA), which holds government cash. He suggested that using more of this balance could add additional liquidity to markets.
However, there is currently no confirmed plan for the Treasury to use the entire balance for purchases. Treasury estimates show it expects to maintain a large cash balance while continuing regular government borrowing.
The Federal Reserve’s actions are also separate from the Treasury’s program. The New York Fed is conducting reserve-management purchases to maintain sufficient liquidity in the banking system, but these operations are not connected to Treasury bond buybacks.
Hayes said his investment firm Maelstrom has moved to maximum risk exposure, with large positions in Bitcoin, Ethereum, Ethena, and Ether.fi. However, he did not provide details about the size of those investments.
He also warned that even during a strong bull market, Bitcoin could experience major price drops.
For now, investors are watching what happens after Sept. 9, when the larger Treasury buyback limits begin. The market will be looking at actual purchase activity, bond yields, Treasury cash levels, and Bitcoin’s reaction.
While Hayes believes the next Bitcoin bull market has started, the long-term impact of Treasury buybacks is still uncertain and will depend on how markets respond in the coming months.
