Arthur Hayes Warning: 'Invisible QE' Could Restart, Potentially Igniting the Next Bitcoin Bull Market

On November 4th, Arthur Hayes, the co-founder of BitMEX, released a new article indicating that the U.S. Treasury and the Federal Reserve are brewing a "Stealth QE," which is likely to become a key driver for a new round of surges in the Bitcoin and crypto markets. Currently, U.S. government spending is continuously expanding, and political incentives lead them to prefer issuing debt over imposing taxes. Foreign central banks, due to the risk of their dollar assets being seized after the Russia-Ukraine conflict, are more inclined to purchase gold rather than U.S. bonds. The U.S. private savings rate is not sufficient to support bond issuance, while the four major commercial banks only absorb a small portion of new bonds. "Relative Value (RV) hedge funds" have become the marginal buyers of U.S. bonds, mainly using repurchase agreements (repos) to purchase U.S. bonds. The U.S. Treasury is expected to issue approximately $2 trillion in new bonds annually to cover the deficit. When market liquidity is tight and the SOFR (Secured Overnight Financing Rate) exceeds the upper limit of the federal funds rate, the Federal Reserve directly injects cash into the market through the Standing Repo Facility (SRF). This is equivalent to "covert QE": printing money → lending → supporting the bond market. As the usage of the SRF increases, global dollar liquidity rises, and the actual effect is equivalent to QE. Hayes predicts that this will reignite the bull market cycle of Bitcoin and the crypto market. "Whenever the Fed expands its balance sheet, BTC will rise." Currently, during the U.S. government shutdown and Treasury auction period, there is a short-term liquidity tightening, which puts pressure on the crypto market. Hayes advises investors to "preserve capital and wait for opportunities," stating that the market will experience a strong rebound after the "Stealth QE launch."