Bitcoin (BTC) could be on the verge of a historic rally, with former BitMEX CEO and crypto heavyweight Arthur Hayes forecasting a climb to $200,000.
In his latest essay, “Ski Cut,” Hayes argues that a little-discussed U.S. Treasury maneuver, large-scale bond buybacks, will unleash a tidal wave of dollar liquidity, sending BTC soaring past $110,000 and beyond.
The Treasury Buy Back
The prediction comes against a backdrop of market-moving events, from President Donald Trump’s tariff threats to Federal Reserve uncertainty. However, the analyst believes the real catalyst lies in the U.S. Treasury’s buyback program, where the government issues new debt to repurchase older, less liquid bonds.
While it isn’t the outright money minting Hayes has hinted at previously, he says the mechanism can indirectly fuel liquidity by stabilizing bond volatility and enabling leveraged hedge funds to keep piling into Treasuries.
He drew a parallel to late 2022, when then-Treasury Secretary Janet Yellen drained the Fed’s Reverse Repo Program (RRP) to inject liquidity into markets. At that time, Bitcoin initially bottomed, but then embarked on a 6x rally.
The possibility of BTC hitting $200,000 depends on two key developments. First, there have to be continued Treasury buybacks. According to Hayes, if the deficit widens, as early May data could confirm, the Treasury is likely to ramp up buybacks to suppress bond yields, further loosening financial conditions.
Secondly, the BitMEX co-founder expects to see Fed complicity. Despite the agency’s inflation-fighting rhetoric, Hayes believes it may tacitly support liquidity measures, whether through slowing quantitative tightening (QT) or adjusting bank reserve requirements.
A Hedge Against Currency Devaluation
The implications for investors are clear: Bitcoin remains the premier hedge against monetary debasement. And if Hayes is right, the real fireworks are just beginning.
“Bitcoin will continue to lead the way as it is the direct beneficiary of more fiat dollars sloshing about,” he declared. “Now that the global community believes Trump is a madman crudely and savagely wielding the tariff weapon, any investor with US stocks and bonds is looking for something whose value is anti-establishment. Physically, that’s gold. Digitally, that’s Bitcoin.”
The market appears to be listening. Bitcoin has punched above $90,000 for the first time in more than six weeks. Trading around $93,531 at the time of writing, BTC is up 5.8% in the last 24 hours and 11.8% over the past week, edging out the broader crypto market’s 10.2% surge in the same period.
