BitMEX founder and cryptocurrency analyst Arthur Hayes recently claimed in his latest article that the US government and the Federal Reserve have initiated a process he terms “stealth QE” (quantitative easing). According to Hayes, this development could spark a new bullish wave in Bitcoin and the broader cryptocurrency market.
Hayes explained that the US government has opted to borrow funds rather than raise taxes to cover its rising spending. However, he argued that this approach is unsustainable. One key reason is that foreign central banks are shifting their reserves from dollar-denominated assets toward gold. Additionally, the US savings rate is not sufficient to support the increasing issuance of new government bonds.
He pointed out that the four major US commercial banks are only purchasing a small portion of the newly issued bonds. To fill the funding gap, relative value hedge funds are stepping in, using leverage through repurchase agreements to finance US bonds.
Looking ahead, the US Treasury Department is expected to issue approximately $2 trillion in new debt annually over the coming years. Hayes noted that when liquidity tightens, the Federal Reserve injects funds into the market via its fixed repurchase (repo) mechanism. He described this action as “indirect monetary expansion.”
The increased use of repos contributes to expanding global dollar liquidity, ultimately creating an effect similar to traditional quantitative easing. Hayes believes that when this process accelerates, it could trigger a strong recovery wave for Bitcoin and the wider cryptocurrency market.
During the current period, Hayes stated that market liquidity has been temporarily squeezed due to factors such as the US government shutdown and ongoing bond auctions.
Concluding his article, Hayes confidently stated: “The market will rebound sharply once ‘stealth QE’ kicks in,” arguing that the upcoming quantitative easing could usher in a new bull season for cryptocurrencies.
*This is not investment advice.*
https://bitcoinethereumnews.com/tech/bitmex-founder-arthur-hayes-reveals-event-he-claims-will-ignite-the-bullish-spark-amidst-the-downturn/