US Treasury’s $1 Trillion Liquidity Boost Expected to Propel Bitcoin Price to $100,000
Arthur Hayes, co-founder of BitMEX, predicts that the US Treasury’s injection of up to $1 trillion into the markets will drive Bitcoin past its all-time high of $73,700, propelling it to $100,000. Hayes believes that this move by the Treasury, aimed at maintaining a robust economy to support Vice President Kamala Harris’s electoral success, will have a significant impact on Bitcoin’s price.
In a recent blog post, Hayes emphasized that the combination of increased dollar liquidity and a rally in Bitcoin and Ether will lay the groundwork for a resurgence in alternative cryptocurrencies, known as “shitcoins.” He anticipates a bullish trend in the crypto market, with Bitcoin leading the way and other digital assets following suit.
Hayes also touched upon the potential for an “altcoin season,” suggesting that it will only materialize after Bitcoin and Ether breach the price levels of $70,000 and $4,000, respectively. He specifically highlighted Solana, predicting a 75% surge to $250, nearing its previous all-time high.
The injection of liquidity by the US Treasury can occur through two main channels, as outlined by Hayes. One approach involves utilizing the Reverse Repo Program, a fund of $321 billion established by the Federal Reserve during the pandemic. By offering higher yields on Treasury bills, the Treasury aims to attract funds away from the Reverse Repo Program, facilitating the flow of liquidity back into the economy.
Additionally, the Treasury plans to issue $271 billion in Treasury bills and repurchase $30 billion worth of older Treasury bonds each quarter, amounting to a total potential injection of $301 billion. Another avenue for injecting liquidity involves utilizing the $750 billion in the Treasury general account to prevent a government shutdown.
Hayes emphasized that injecting between $301 billion and $1 trillion into the markets before the year’s end will likely trigger a bullish trend across various asset classes, including cryptocurrencies. This strategic move is expected to create a favorable market environment leading up to the upcoming election.
In terms of market movements, Bitcoin has seen a 2.6% increase over the past 24 hours, trading at $60,833, while Ethereum has also risen by 2.6% to reach $2,724. These developments suggest a positive trajectory for the crypto market in response to the anticipated liquidity injection and economic strategies outlined by the US Treasury.
For more insights on Bitcoin, macroeconomics, and market trends, readers can connect with Tom Carreras, a markets correspondent for DL News, via email at tcarreras@dlnews.com. Hayes’s analysis underscores the interconnected nature of economic policies, market dynamics, and cryptocurrency valuations, highlighting the potential impact of Treasury actions on the broader financial landscape.
