Hayes Predicts $250,000 Bitcoin As Fed Caves To QE Pressure

In a brand new essay revealed on March 31, former BitMEX CEO Arthur Hayes lays out a case for a $250,000 Bitcoin worth goal by year-end, grounded in his perception that the US Federal Reserve has successfully capitulated to fiscal dominance and resumed de facto quantitative easing (QE) for US Treasury markets.

The essay, laced with vivid satire and underpinned by rigorous macroeconomic evaluation, argues that the Fed’s latest shift in coverage indicators a structural return to fiat liquidity enlargement—an setting traditionally useful to Bitcoin and different exhausting belongings. “Powell proved last week that fiscal dominance is alive and well,” Hayes wrote. “Therefore, I am confident QT, at least regarding treasuries, will stop in the short to medium term… Bitcoin will scream higher once this is formally announced.”

QE Returns, Fiat Dies, Bitcoin Flies

Hayes facilities his argument on the Federal Reserve’s March FOMC assembly, throughout which Chair Jerome Powell advised that stability sheet discount—or Quantitative Tightening (QT)—would sluggish significantly. Powell acknowledged: “We strongly want the MBS [mortgage-backed securities] to roll off our balance sheet at some point. We would look closely at letting the MBS roll off but keep the overall balance sheet size constant.”

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This coverage configuration, dubbed “QT Twist” by Hayes, implies that the Fed will reinvest MBS runoff proceeds into US Treasuries, thereby supporting bond costs whereas holding the nominal stability sheet regular. Hayes characterizes this as “treasury QE,” even when not labeled as such.

“If the Fed balance sheet is kept constant, then they can buy: Max $35 billion per month of treasuries or annualized $420 billion,” Hayes calculated. In addition, the tapering of Treasury QT from $25 billion to $5 billion per 30 days represents an annualized $240 billion optimistic shift in greenback liquidity.

To body the Fed’s political constraints, Hayes invoked a satirical dialogue by which Powell is subjected to humiliation by Treasury Secretary Scott Bessent—a fictionalized dramatization that underscores the subordination of financial coverage to fiscal necessity. In this theatrical allegory, Powell is instructed by Bessent: “Next week at the FOMC, you are going to start tapering QT for my treasury bonds and announce that QE for treasury bonds will start in the near future. Do you understand?”

Hayes reinforces his level by drawing historic parallels to Arthur Burns, Fed Chair through the inflationary Nineteen Seventies, who admitted in his 1979 speech “The Anguish of Central Banking” that political strain rendered the Fed powerless to cease inflation.

Burns wrote: “The Federal Reserve was itself caught up in the philosophic and political currents that were transforming American life and culture… Monetary policy came to be governed by the principle of under-nourishing the inflationary process while still accommodating a good part of the pressures in the marketplace.”

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Hayes sees the identical dynamic right this moment, intensified by the federal government’s ballooning debt burden and the necessity to finance deficits at low yields.

Trump’s Policy Agenda

Hayes ties the Fed’s pivot to the political realities of a second Trump administration, notably its industrial coverage objectives. Trump has pledged to scale back the US fiscal deficit from 7% to three% of GDP by 2028, whereas reshoring manufacturing, sustaining navy spending, and avoiding cuts to entitlements.

However, Hayes argues that these aims are mathematically incompatible with out central financial institution help, given the dimensions of debt issuance required. “The maths don’t add up unless Bessent can find a buyer of treasuries at an uneconomically high price or low yield. Only US commercial banks and the Fed have the firepower to buy the debt at a level the government can afford.”

To unlock that capability, Hayes anticipates the Fed is not going to solely halt QT but in addition exempt banks from the Supplementary Leverage Ratio (SLR)—a key regulatory constraint limiting financial institution purchases of U.S. Treasuries.

Bessent himself hinted at such a transfer on the All-In Podcast, stating: “If we take [SLR] away… we might actually pull treasury bill yields down by 30 to 70 basis points. Every basis point is a billion dollars a year.”

Hayes maintains that Bitcoin is uniquely positioned to learn from this shift in financial regime. Unlike equities, that are entangled within the authorized and political structure of the state, Bitcoin is a bearer instrument native to the digital realm, with no counterparty threat.

“Bitcoin trades solely based on the market expectation for the future supply of fiat,” he wrote. “If my analysis… is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end.”

Referencing gold’s response to QE1 in 2008–2009, Hayes highlights how liquidity injections can result in delayed however explosive repricing of anti-fiat belongings. In his view, Bitcoin is now enjoying the identical position gold as soon as did—solely sooner and with extra direct world publicity.

Hayes additionally supplied perception into Maelstrom’s capital deployment strategy. “We use no leverage, and we buy in small clips relative to the size of our total portfolio,” he mentioned. “We have been buying Bitcoin and shitcoins at all levels between $90,000 to $76,500.”

At press time, BTC traded at $83,500.

Featured picture from YouTube, chart from TradingView.com