Arthur Hayes, co-founder of BitMEX, has once again drawn attention to liquidity as the ultimate fuel for crypto rallies. According to Hayes, once the U.S. Treasury General Account (TGA) hits its $850B target, liquidity will be free to flow back into private markets — setting the stage for crypto to enter “up only” mode.
What’s Happening:
TGA Balance Rising: The Treasury’s account already sits above $807B, closing in on the $850B mark. Until it’s filled, capital remains locked away and out of markets. Once complete, the liquidity drain ends, freeing cash back into financial assets.
Fed Rate Cuts Begin: The Federal Reserve cut rates by 25bps this week — the first cut since 2024. Markets expect another 25–50bps cut in October, with futures pricing in a more dovish path ahead.
Liquidity Cycles & Bitcoin: While some analysts, like Bitwise’s André Dragosch, downplay the tight correlation between net liquidity and Bitcoin, history shows BTC thrives during easing cycles and liquidity expansions.
Market Implications:
Bitcoin ($BTC $115,700): Briefly dipped below $115K on the Fed cut (“sell the news”), but macro liquidity tailwinds suggest a move toward $130K–$150K as liquidity returns.
Ethereum (ETH): Poised to benefit both from macro liquidity and its upcoming Fusaka upgrade. $ETH remains on track for $5K–$6K once flows accelerate.
Altcoins & DeFi: Liquidity expansion favors high-beta assets. As institutional inflows build and yields compress, capital is likely to rotate aggressively into altcoins and DeFi for higher returns.
Speculative Outlook:
Once the TGA fill completes, the Fed’s dovish pivot could align perfectly with a crypto risk-on wave.
Every dip into support zones may become an accumulation opportunity ahead of a liquidity-fueled breakout.
Bitcoin to $150K, ETH to $6K, Solana to $400+ remain realistic scenarios if institutional money accelerates alongside Fed easing.
Investor Takeaway: Liquidity is the oxygen of bull markets. With the Treasury near its $850B target and the Fed resuming rate cuts, crypto markets are setting up for the next parabolic leg higher. The playbook is clear: position before the floodgates open.