Arthur Hayes: US preparing for stealth QE that will reignite crypto bull market

BitMEX founder Arthur Hayes predicted on his blog that the U.S. Treasury and the Federal Reserve appear to be preparing for a form of stealth quantitative easing (QE) that will reignite the crypto bull market. He argued that the U.S. government prefers to fund its spending by issuing bonds rather than raising taxes. However, demand for this debt is weakening, as foreign central banks increase their gold holdings due to the perceived risks of dollar assets, while private sector demand for U.S. Treasurys remains sluggish. Hayes noted that even the four largest commercial banks have only absorbed a portion of the newly issued debt. Amid this backdrop, the Treasury is expected to issue $2 trillion in new bonds annually to cover the fiscal deficit. If liquidity is insufficient, Hayes believes the Fed will inject funds into the market through its Standing Repo Facility (SRF), an action with effects similar to QE. He advised accumulating cash until this scenario materializes, emphasizing that the market will rebound quickly and strongly once QE begins.