TLDR
- Arthur Hayes predicts Bitcoin will enter “up only” mode once the US Treasury General Account reaches its $850 billion target, currently at $807 billion
- The Federal Reserve cut interest rates by 25 basis points in their first reduction since 2024, causing Bitcoin to briefly dip below $115,000
- André Dragosch from Bitwise disputes Hayes’ theory, calling the correlation between net liquidity and Bitcoin prices weak
- 91.9% of traders expect another rate cut of up to 50 basis points at the October Federal Open Market Committee meeting
- Hayes argues that once the Treasury stops filling its account, liquidity will flow back into private markets and boost crypto prices
Arthur Hayes, co-founder of cryptocurrency exchange BitMEX, believes Bitcoin markets are positioned for an “up only” phase. His prediction hinges on the US Treasury General Account reaching its target balance of $850 billion.
The Treasury’s General Account currently holds $807 billion as of Friday. Hayes argues that funds stored in this government account are kept separate from private financial markets. When the Treasury fills its account, these dollars do not circulate through the broader economy.
TGA refill almost done – target is $850bn. With this liquidity drain complete, up only can resume. pic.twitter.com/LSVieKX2J8
— Arthur Hayes (@CryptoHayes) September 20, 2025
Hayes wrote that once “this liquidity drain complete, up only can resume.” He expects money to flow back into financial assets once the Treasury slows its accumulation process. This theory suggests Bitcoin and other cryptocurrencies could benefit from increased liquidity.
The Federal Reserve made its first interest rate cut since 2024 on Wednesday. The central bank reduced rates by 25 basis points, or a quarter of a percent. Bitcoin’s price dropped below $115,000 immediately after the announcement in what traders call a “sell-the-news” event.
Nic Puckrin from Coin Bureau suggested the rate cut was already factored into market prices. He warned investors about potential short-term pullbacks despite the Fed’s dovish monetary policy stance.
Market Analysts Question Liquidity Theory
Not all financial experts support Hayes’ liquidity-focused prediction. André Dragosch, European head of research at investment firm Bitwise, challenged the connection between net liquidity and Bitcoin prices.
Dragosch called the correlation “loose at best” and described Hayes’ theory as “a useless banana.” This pushback highlights disagreement among analysts about what drives cryptocurrency price movements.
Federal Reserve Signals Divided Committee
Federal Reserve Chairman Jerome Powell indicated that committee members remain split on future rate cuts. The Federal Open Market Committee, which includes 19 officials, will decide monetary policy at upcoming meetings.
Chicago Mercantile Exchange data shows 91.9% of traders expect another rate cut at the October meeting. These traders anticipate a reduction of up to 50 basis points, or half a percent.
The CME Group operates major financial derivatives exchanges and futures marketplaces. Their data reflects trader sentiment about Federal Reserve policy decisions.
Many cryptocurrency investors expect rising liquidity levels in coming months. They believe the Fed’s rate-cutting cycle will boost asset prices until liquidity decreases and tightening begins again.
The current debate centers on whether Treasury account balances directly influence cryptocurrency markets. Hayes maintains his position while facing skepticism from other market observers.
Bitcoin markets continue to react to both Federal Reserve policy changes and government fiscal operations. The Treasury’s General Account balance sits $43 billion away from Hayes’ predicted $850 billion target.
