[DigitalToday reporter Jinju Hong] Arthur Hayes said expanded U.S. Treasury bond buying could lead to a bitcoin bull market.

On Aug. 25 local time, blockchain media outlet CoinPost reported that Hayes said recent steps by U.S. Treasury Secretary Scott Bessent have a structure similar to dollar liquidity provision in 2023 under former Treasury Secretary Janet Yellen.

The U.S. Treasury said on Aug. 19 it would double the size of each purchase of long-term Treasury bonds past maturity to at least $4 billion from $2 billion. CNBC reported on Aug. 24, citing a senior Treasury official, that the Treasury General Account (TGA) with a balance of about $950 billion could be used as funding for the purchases.

Hayes viewed the step not as routine bond management but as a signal of expanding market liquidity. He cited the 2023 ATI policy in which Yellen shifted issuance from a long-term bond-heavy mix to short-term Treasury bills. He said funds tied up in the reverse repurchase agreement facility (RRP) returned to the banking system, boosting overall market liquidity, and bitcoin rebounded from its post-FTX collapse low in that flow.

Hayes said the RRP balance fell from about $2.5 trillion at the time to around $100 billion in January 2025, when Bessent took office as Treasury secretary. During that period, bitcoin turned to a rebound, and the U.S. 10-year Treasury yield of 5 percent, seen as a market inflection point, also fell, he said.

The cryptocurrency market has also been sensitive to that interpretation recently. On a daily basis, bitcoin rose above its 200-day moving average for the first time in about 10 months, and about $1.4 billion of short positions were liquidated following the announcement of expanded Treasury purchases. Remarks by U.S. President Donald Trump also served as a catalyst for gains.

Hayes said it was not yet confirmed that the expansion in Treasury purchases alone had stabilised interest rates. He said when the 10-year yield nears 5 percent, mortgage rates and corporate bond yields rise as well, increasing the burden on the economy. That strengthens the Treasury's incentive to move to restrain rates, he said. In fact, bitcoin briefly rebounded after the Aug. 19 announcement, but the 10-year yield rose above its pre-announcement level on the next trading day.

In this situation, Hayes said the market is testing the Treasury's ability to mobilise funds. He expected further liquidity-supply measures were likely to follow, including greater use of the TGA or expanded Treasury purchases through the U.S. Federal Reserve's Reserve Management Program (RMP).

Hayes said bitcoin's upward trend could be maintained as long as expanded liquidity provision continues. At the same time, he warned to avoid leveraged trading, saying price volatility could increase further. Maelstrom, where he serves as chief investment officer, is maintaining a bullish investment stance on bitcoin, ethereum, ethena and EtherFi.