Bitcoin tops $80,000 as Hayes says Treasury buybacks fuel bull market

Treasury-led liquidity, not Federal Reserve rate cuts, is set to power Bitcoin's next leg higher, according to BitMEX co-founder Arthur Hayes.

Bitcoin traded above $80,000 on Aug. 25, up 28% in August, after Arthur Hayes said Treasury buybacks mark a new bull market.

"Bitcoin stands to benefit first as expanded long-dated US Treasury buybacks add dollar liquidity to the financial system," Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, said in his Aug. 24 essay "Same Same But Different."

The Treasury will at least double long-end liquidity-support buybacks to $4 billion per operation from $2 billion, effective Sept. 9 through Nov. 4. Hayes views the purchases as liquidity injections that can limit pressure on long-term yields, reducing the relative appeal of bonds and supporting risk demand. He also raised the possibility of a Treasury General Account drawdown — the account holds roughly $1 trillion — and de facto yield-curve control if the 10-year Treasury yield climbs above 5 percent.

Fresh demand from spot funds supported the move. US-listed Bitcoin ETFs attracted $337.56 million on Aug. 24, a sixth straight session of net inflows, SoSoValue data shows, while Arkham reported BlackRock clients bought $1.33 billion of Bitcoin last week. Hayes warned the rally could bring unusually wide price swings, with Maelstrom now in "maximum risk" mode across Bitcoin, Ether, Ethena and Ether.fi.

Treasury Buybacks Echo the 2023 Playbook

Hayes compared Bessent's approach with former Treasury Secretary Janet Yellen's issuance strategy in late 2023. At the time, the Treasury increased its reliance on short-term bills, and higher bill yields encouraged money-market funds to shift roughly $2.4 trillion out of the Federal Reserve's reverse repo facility into government securities. That liquidity coincided with gains in Bitcoin and the Nasdaq 100 even as the central bank held rates near 5.3 percent and shrank its balance sheet.

By the time Bessent took office in January 2025, the reverse repo balance had fallen from $2.5 trillion to $100 billion. Bessent announced an additional $20 billion in long-dated bond buybacks on Aug. 19, a sum Hayes called insignificant against America's roughly $40 trillion debt stock. The market's relief rally lasted a single trading day before the 10-year yield climbed back to pre-announcement levels.

Hayes outlined several possible paths. His most bullish scenario would see Bessent promise unlimited buybacks of Treasuries with maturities of 10 years or longer whenever yields exceed 5 percent. A more likely outcome involves progressively larger buybacks alongside a drawdown of the Treasury General Account. The bearish case — Washington cutting fiscal spending — he called unlikely with elections approaching.

Price Levels and the Path to $95,000

Bitcoin's immediate intraday barrier sits at $81,237.94, with a sustained move beyond $80,900 exposing $83,000 under the supplied trend model. Failure below $77,700 would place $74,500 back in focus. The report places the 200-day moving average near $69,115, with $69,100 as longer-term support and $95,000 as the upside target while that level holds. RSI reads 90.

Hayes did not attach a specific price target to his bull-market call. He warned that greater liquidity could bring higher volatility and "savage mini-corrections," making leverage dangerous for anyone who is not a full-time trader. "Whether Bessent pumps fast or slow, Bitcoin will continue its rally," he wrote.

The Treasury projects $739 billion of privately held net marketable borrowing in the third quarter, assuming a $950 billion cash balance at September's end, with the TGA potentially peaking near $1.05 trillion in late October.

This article is for informational purposes only and does not constitute investment advice.