Bitcoin is witnessing a 16-year high in 30-year U.S. government bond yields, and money printing is all but guaranteed, says the ex-BitMEX CEO.
Bitcoin (BTC) flipping full bull could come courtesy of the United States government, a new prediction says.
In an X thread on Oct. 4, Arthur Hayes, former CEO of crypto exchange BitMEX, eyed ballooning yields as precursor to a new Bitcoin and crypto bull market.
Hayes: Bitcoin bulls should eye U.S. “no way out” moment
U.S. treasury yields are “screaming higher,” and with that, Hayes believes that a macroeconomic flashpoint is only a matter of time.
The reason comes in the form of a so-called “bear steepener” — a phenomenon that describes long-term interest rates rising more quickly than short-term ones.
“Why do I love these markets right now when yields are screaming higher? Bank models have no concept of a bear steepener occurring,” he argued.
Given the current steep rise in the 2s30s curve — the difference between the 30-year and 2-year yields — combined with rising long and short-term interest rates, the pressure across the economy is rising.
“Due to the leverage and non-linear risks embedded in banks’ portfolios, they will be selling bonds or paying fixed on IRS as rates rise. More selling, begets more selling, which is no bueno for bond prices,” Hayes continued.
The result should be clear — a return to mass liquidity injections, counteracting the quantitative tightening seen since late 2021 which has pressured crypto markets.
For Hayes, this cannot come without major casualties along the way. He concluded:
Total US debt just rose $275 billion in one day—the same amount as last month's total borrowing.
Yet —
• Unskilled military-aged foreign men are invading
• Violent criminals caught & released
• Open-air drug use
• American culture in shamblesThe US doesn't work for you. pic.twitter.com/03YUxyiQtB
— Joe Consorti ⚡ (@JoeConsorti) October 3, 2023
“In a single day, the US added more than half of Bitcoin’s entire market cap in debt,” Samson Mow, CEO of Bitcoin adoption firm Jan3, responded.
“That’s something like 10 million BTC . And yet there are still people that are unsure if $27k is a good price to buy.”
BTC/USD traded at around $27,500 at the time of writing.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
