Arthur Hayes, the co-founder of BitMEX, anticipates a bullish phase for the crypto market, contingent upon the U.S. Treasury General Account (TGA) reaching its $850 billion target. Hayes suggests that once the TGA is filled, the crypto market could enter an "up only" mode, signaling a potential surge in prices.

The Treasury General Account (TGA) is essentially the checking account of the U.S. Treasury Department. It holds the government's operating cash. When the TGA is being filled, funds are generally withdrawn from the market, which can reduce liquidity. Conversely, when the TGA balance declines, it injects liquidity into the economy. Hayes has been closely monitoring the TGA as a key indicator of liquidity and its potential impact on the crypto market.

Hayes's analysis suggests that the completion of the TGA refill would mark the end of a liquidity drain, paving the way for renewed upward momentum in the crypto market. He has been using a custom index on Bloomberg Terminal to monitor the impact of TGA refills on the U.S. dollar's liquidity. He intends to increase his cryptocurrency purchases as long as the net liquidity index remains positive.

However, some analysts are not entirely convinced by Hayes's prediction. André Dragosch, the European head of research at Bitwise, believes that net liquidity has a loose correlation with Bitcoin and crypto, deeming it a "useless banana".

Broader Market Outlook

Beyond the TGA, Hayes has expressed a bullish outlook on crypto, influenced by several factors:

• Monetary Policy: Hayes believes that continued money printing by central banks could extend the crypto bull cycle into 2026. He argues that governments will continue to print money, which will support cryptocurrencies.
• Political Factors: Hayes anticipates that President Trump's policies, if he remains in office, could further stimulate the market through fiscal stimulus and increased liquidity. He suggests Trump may implement policies to provide "free stuff" and print money to maintain popular support.
• Bitcoin's Potential: Hayes has previously predicted that Bitcoin could reach $200,000 by the end of 2025 and potentially $1 million by the end of 2028. He believes that ongoing deficit spending and monetary intervention will undermine confidence in fiat currencies, thus promoting Bitcoin as a hedging tool. The confirmation of Stephen Miran to the Federal Reserve Board has also led Hayes to speculate that Bitcoin could reach $1 million if the Fed implements yield curve control.
• Broader Economic Trends: Hayes expects Bitcoin to outperform traditional assets like stocks and real estate. He notes that while U.S. equities may be up in dollar terms, they have not performed as well against gold, and Bitcoin has outperformed both.

Rate Cuts and Market Response

The U.S. Federal Reserve recently cut interest rates by 25 basis points, the first cut since 2024. Following the rate cut, Bitcoin briefly dipped below $115,000, a phenomenon often referred to as a "sell-the-news" event. Despite this short-term pullback, many crypto investors and traders anticipate rising liquidity levels in the coming months as the Federal Reserve leans into the interest rate-cutting cycle, which should boost asset prices until liquidity dries up and the rate-tightening process begins again.

Cautionary Notes

Hayes also cautions against overconfidence, as excess liquidity can lead to speculative moves disconnected from fundamentals, increasing the risk of sharp short-term corrections. He stresses the importance of patience and a broader market vision, and warns that instant wealth expectations from Bitcoin are unrealistic.