Bitcoin News Today: Bitcoin's $250K Outlook Hinges on Fed's Liquidity Turnaround

Arthur Hayes, co-founder of BitMEX and a prominent figure in the crypto and finance spheres, has declared that the Federal Reserve's era of quantitative tightening (QT) is over, signaling a potential shift toward liquidity injections that could supercharge asset markets. In a series of posts on X, Hayes argued that the Fed is nearing a breaking point as stock prices fall while Treasury yields rise-a dislocation he calls a "game over" scenario. "Stocks down, 10-yr yield up, bad! (now)," Hayes wrote, warning that shrinking dollar flows from exports are exacerbating liquidity strainsArthur Hayes says it’s ‘game over’ for the Fed. Here is why Powell ...^[1].

Hayes' analysis ties directly to his bullish outlook for Bitcoin, which he predicts could surge to $250,000 by year-end if the Fed pivots to quantitative easing (QE). In a blog post, Hayes linked Bitcoin's potential rally to a halt in QT and a return to liquidity injections, stating, "Bitcoin trades solely based on the market expectation for the future supply of fiat"Bitcoin to $250K? Hayes Links Price Surge to Fed’s QE …^[2]. He emphasized that the Fed's recent reduction of the Treasury runoff cap and potential reinvestment of mortgage-backed securities into Treasurys effectively constitute "treasury QE," which would boost Bitcoin pricesBitcoin price can hit $250K in 2025 if Fed shifts to QE: …^[3].

Federal Reserve Chair Jerome Powell has hinted at a similar turning point. In a speech to the National Association for Business Economics, Powell acknowledged that the Fed may end its balance-sheet reduction in the coming months to avoid liquidity strains in short-term funding markets. "We may approach that point in coming months, and we are closely monitoring a wide range of indicators to inform this decision," he said. Powell's remarks align with Hayes' assessment, as the Fed's prolonged QT has led to funding pressures and a fragile labor market, prompting calls for intervention.

Market reactions underscore the urgency. The 10-year Treasury yield surged to 4.386%-its highest level since February-as traders priced in a 56% probability of a May rate cutArthur Hayes says it’s ‘game over’ for the Fed. Here is why Powell ...^[1]. Meanwhile, Bitcoin surged to $65,000 following Hayes' March 20 comments about QT's end, with trading volumes on major exchanges like Binance spiking by 20%Arthur Hayes Highlights End of Quantitative Tightening and …^[4]. Analysts like Jamie Coutts of Real Vision see Bitcoin hitting $132,000 by year-end based on M2 money supply growth, while Polymarket data shows 60% of traders expect a $110,000 targetBitcoin price can hit $250K in 2025 if Fed shifts to QE: …^[3].

The Fed's internal debate over reserves and policy tools further complicates the outlook. Powell defended paying interest on bank reserves (IORB), calling it critical for controlling short-term rates, while dissenting officials like Governor Christopher Waller advocate for a smaller balance sheet. Hayes, however, argues that the Fed will "flood the market with dollars" to stabilize the economy, enabling China's central bank to ease onshore conditions and boost yuan liquidityBitcoin price can hit $250K in 2025 if Fed shifts to QE: …^[3].

For investors, the implications are clear: a shift from QT to QE could reignite risk appetite, with Bitcoin and Treasurys as key beneficiaries. Yet, as QCP Capital warns, stagflation risks and Trump-era tariffs could force the Fed into rate hikes, complicating the bullish narrativeBitcoin to $250K? Hayes Links Price Surge to Fed’s QE …^[2]. The coming months will test whether Powell and the Fed can navigate these tensions without triggering market instability-a challenge reminiscent of Paul Volcker's 1980s inflation battleArthur Hayes says it’s ‘game over’ for the Fed. Here is why Powell ...^[1].

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