TLDR:
- Hayes says expanded Treasury buybacks are fueling dollar liquidity and a new Bitcoin bull run
- Maelstrom is now at maximum risk, with major exposure to Bitcoin, Ether, ENA and ETHFI tokens
- Ten-year yields briefly fell after Bessent’s August 19 buyback announcement, then rebounded
- Hayes compares Bessent’s strategy to Yellen’s 2023 Activist Treasury Issuance liquidity move
Arthur Hayes says a Bitcoin bull market is underway, pointing to expanded Treasury buybacks as the trigger. The BitMEX co-founder and Maelstrom chief investment officer laid out the case in a new essay.
He said Treasury Secretary Scott Bessent’s larger bond repurchases are adding dollar liquidity to the financial system.
Hayes argued that liquidity typically reaches Bitcoin before other risk assets respond. He published the essay, titled Same Same But Different, on August 25, 2026.
Hayes Declares a New Bitcoin Bull Market
Hayes said the current setup mirrors conditions that preceded past Bitcoin rallies. He expects the new bull market to feature sharper volatility than in earlier cycles. Maelstrom has positioned itself for that outcome.
Hayes described Maelstrom as being at “maximum risk.” The fund carries major exposure to Bitcoin, Ether, ENA, and ETHFI, according to the report. That positioning reflects his broader conviction that dollar liquidity is turning in favor of crypto.
Hayes sees an aggressive scenario where the Treasury pursues de facto yield-curve control. That step could follow if ten-year yields breach five percent.
A more likely path, Wu Blockchain noted, involves steadily larger buybacks over time. It also involves deployment of roughly $1 trillion held in the Treasury General Account.
Treasury Buybacks Fuel the Liquidity Case
Bessent announced larger long-end Treasury buybacks on August 19, 2026, catching markets by surprise. The move raised next quarter’s buyback total by $20 billion at the long end. Ten-year yields fell quickly, and Bitcoin rallied over the following two trading days.
By the next session, however, yields moved back above pre-announcement levels. Hayes said the buyback size was too small relative to $40 trillion in total federal debt.
The ten-year Treasury yield shapes mortgage rates, corporate bonds and broader consumer borrowing costs across the economy.
Once yields approach five percent, financing becomes expensive and growth tends to slow. Bessent has moved to defend that level, much as his predecessor once did.
Hayes wrote that Bitcoin “is the global liquidity smoke alarm,” reacting faster than other assets to policy shifts. He said Bessent could also draw down the Treasury General Account to fund larger repurchases. The Fed’s Reserves Management Program adds another channel, buying Treasury bills on an ongoing basis.
Yellen Precedent Reinforces Hayes’ Bull Case
Hayes drew a direct line to former Treasury Secretary Janet Yellen’s approach in late 2023. Affordability was the top concern for American voters ahead of the 2024 election. Yellen increased the share of debt issued as short-term Treasury bills rather than longer bonds.
That shift pushed money market funds out of the Fed’s Reverse Repo Program and into bills. Hayes’ essay states the Reverse Repo Program balance fell from $2.5 trillion to about $100 billion. That decline occurred by the time Bessent took office on January 20, 2025.
Funds that left the facility became available for banks to re-lend into markets. Hayes’ essay links that liquidity injection to gains in the Nasdaq 100 and Bitcoin. Both assets rose even as the Fed held rates near multi-decade highs.
Economists later described Yellen’s approach using the term Activist Treasury Issuance. Hayes argues Bessent faces the same structural problem today. That parallel is central to why he believes the Bitcoin bull market has already started.
