BitMEX co-founder Arthur Hayes is confident that the cryptocurrency market could experience a surge in bullish momentum, thanks to a potential increase in liquidity. Hayes took to the social media platform X to share his thoughts with his 502,700 followers. He specifically highlighted the upcoming May 1st quarterly refinancing announcement (QRA) from U.S. Treasury Secretary Janet Yellen as a potential catalyst for this market boost. Hayes outlined several fiscal decisions that Yellen could make, which he believes would reignite the crypto market.
Firstly, Hayes suggested that Yellen could halt the issuance of treasuries by depleting the U.S. Treasury General Account (TGA) to zero. This move would inject $1 trillion of liquidity into the market. Secondly, he proposed that Yellen could shift more borrowing to T-bills, which would remove funds from the reverse repurchase agreement (RRP) and result in a $400 billion injection of liquidity. Finally, Hayes proposed a combination of the first two options, where no long-term bonds would be issued, only bills, and both the TGA and RRP would be depleted simultaneously. This would inject $1.4 trillion of liquidity into the market.
Hayes went on to assert that the actions of the Federal Reserve (Fed) are inconsequential in this regard. He believes that if any of the three scenarios outlined above were to occur, investors could anticipate a rally in both stocks and cryptocurrencies.
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