NextFin news, On November 5, 2025, Arthur Hayes, the former CEO of BitMEX and a prominent voice in cryptocurrency markets, publicly predicted that Bitcoin’s next major bull run would reignite, fueled by the expansion of the U.S. Federal Reserve’s balance sheet. Hayes detailed his views in a newly published essay where he identified the Fed’s use of “stealth quantitative easing” via repo operations as a mechanism to inject fresh dollar liquidity into the financial system. This monetary accommodation, he argues, is a response to ballooning U.S. federal deficits and large government borrowing, which necessitate the Fed to quietly expand its balance sheet to support Treasury financing.
Hayes’ thesis was reported by respected crypto news sources, including CCN.com, highlighting the timeline of events as the Fed resumes and expands repo facilities starting late 2025. This expansion introduces capital into risk markets, Bitcoin among them, potentially catalyzing significant upward price momentum. The term “stealth QE” reflects the Fed’s approach of conducting monetary stimulus without explicit, large-scale public announcements typical of past quantitative easing programs.
This development coincides with Bitcoin’s recent price correction, briefly dropping below $100,000—the lowest since early summer 2025. While the cryptocurrency has entered bear market territory after a more than 20% decline from its October peak, influential market analysts like Bitwise CIO Matt Hougan interpret the sell-off as peak retail capitulation and see strong institutional interest as a harbinger of future gains. Hayes and Hougan share optimism that government and Fed liquidity actions will underpin Bitcoin’s next rally, potentially driving prices toward new all-time highs before year-end.
However, the macroeconomic context is nuanced. The U.S. is facing structural liquidity tightening due to the Treasury General Account (TGA) swelling to near $1 trillion amidst a protracted government shutdown and high fiscal uncertainty. This situation has drained liquidity as the Treasury hoards cash, pushing bank reserves down and pressuring short-term funding markets. The Federal Reserve has responded with temporary overnight repo injections—about $30 billion at most recent counts—to alleviate repo market stress, signaling a shift from passive balance sheet reduction to active liquidity management.
Bitcoin prices are extremely sensitive to dollar liquidity fluctuations due to its non-yield-bearing nature and speculative appeal. As dollar liquidity tightens via Treasury cash hoarding and high repo demand, Bitcoin has faced price pressure. Conversely, when government spending resumes and the Fed continues balance sheet accommodations, liquidity is expected to rebound, benefiting risk assets including Bitcoin.
From an analytical standpoint, Hayes’ forecast rests on the interplay of fiscal deficits, Federal Reserve policies, and market liquidity dynamics. The US government’s rising debt burden compels increased Treasury issuance, which in absence of Fed backstops, would crowd out private liquidity. The Fed’s repo operations function as a quasi-QE tool, injecting liquidity discreetly and sustaining dollar availability for financial markets. Historical correlations demonstrate that expansions in the Fed’s balance sheet, coupled with lower Treasury cash buffers, tend to boost risk asset prices.
Moreover, the current environment is marked by a liquidity “vacuum” caused by Treasury’s TGA cash accumulation during the government shutdown, reducing circulating reserves despite a large nominal money supply. This liquidity constriction has stressed interbank funding costs measured by spreads such as SOFR–FDTR widening to about +30 basis points, prompting the Fed’s active intervention. Once legislative resolutions enable government reopening and Treasury spending resumes, this liquidity vacuum may dissipate, unleashing pent-up market demand.
Technically, Bitcoin is at a critical juncture. A failure to hold key support levels near $100,000 could invite deeper corrections toward $92,000 or below, fueled by thin liquidity and continued risk aversion. Nevertheless, institutional investors have voiced confidence in Bitcoin’s long-term fundamentals, supported by macro liquidity expansion and digital asset adoption trends. Forecast ranges around $125,000 to $130,000 by year-end have been proposed contingent on stable liquidity and easing fiscal tensions.
Looking forward, the dynamics of U.S. fiscal policy, Federal Reserve balance sheet management, and liquidity in money markets will be the primary drivers influencing Bitcoin’s price trajectory. Should stealth QE intensify and government deficits remain elevated under President Donald Trump’s administration, the Fed may continue to provide ample liquidity support. This environment could foster renewed risk appetite and propel Bitcoin into a sustained bull cycle, reviving enthusiasm after recent corrections.
However, market participants must remain vigilant to potential volatility induced by political uncertainties, liquidity shocks, and external macroeconomic shocks. The interaction between fiscal gridlock, liquidity provision, and institutional investment flows could produce sharp price swings in the short term. Hence, risk management and strategic positioning remain crucial for market actors navigating this evolving nexus.
In conclusion, Arthur Hayes’ prediction underscores a deeper macro-financial linkage between Federal Reserve balance sheet policies and Bitcoin market cycles. His insight into stealth quantitative easing highlights a shift in monetary dynamics that could act as a catalyst for cryptocurrency resurgence amid complex economic and fiscal conditions in late 2025. Investors and analysts should closely monitor liquidity metrics, Treasury actions, and Fed interventions as key indicators for anticipating the next phase of Bitcoin price movements.
According to authoritative sources including CCN.com and corroborated by detailed liquidity analysis from Wu Blockchain and other market research, the re-expansion of Fed balance sheet and a loosening of liquidity constraints are positioned to reignite bullish momentum in crypto markets, with Bitcoin poised as a principal beneficiary.
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