BitMEX Founder Predicts 10x Bitcoin Gain Amid US Stablecoin Shift

Arthur Hayes, the former chief of BitMEX, has published an essay titled “Quid Pro Stablecoin,” which argues that the United States' recent enthusiasm for bank-issued stablecoins is more about equipping the Treasury with a multi-trillion-dollar “liquidity bazooka” rather than promoting “financial freedom.” Hayes contends that investors who delay purchasing Bitcoin until the Federal Reserve resumes quantitative easing will act as “exit liquidity” for those who bought earlier.

Hayes' thesis centers on the idea that eight “too-big-to-fail” banks hold approximately $6.8 trillion in demand and time deposits, which can be converted into on-chain dollars. He suggests that as customers transition from traditional accounts to bank stablecoins, these deposits become collateral that can be recycled into Treasury bills. This adoption, he argues, could create up to $6.8 trillion of T-bill buying power and significantly reduce compliance overhead through the use of AI agents trained on relevant regulations.

Hayes further proposes a second mechanism involving the Federal Reserve's ability to pay interest on reserve balances. If Congress removes this ability, banks would need to replace the lost income by purchasing short-dated Treasuries. This policy, according to Hayes, could “liberate another $3.3 trillion of inert reserves,” bringing the total potential firepower for government debt purchases to $10.1 trillion. He asserts that this liquidity injection would have a similar impact on risky assets as previous quantitative easing measures.

The essay highlights the bipartisan GENIUS Act as a crucial legislative component. By prohibiting non-banks from issuing interest-bearing stablecoins, this act would give banks a monopoly on the stablecoin market, ensuring that fintech issuers like Circle cannot compete at scale. Hayes calculates that the cost savings and enhanced net-interest margins could increase the combined market capitalization of the big banks by over 180 percent, a trade he describes as “non-consensus” but executable “in SIZE.”

Despite his long-term optimism, Hayes warns of a temporary liquidity drain once Congress passes what he refers to as Trump’s “Big Beautiful Bill.” Refilling the Treasury General Account to its $850 billion target could reduce dollar liquidity by nearly half a trillion dollars, potentially pushing Bitcoin back toward the mid-$90,000s and keeping prices range-bound until the Federal Reserve’s annual Jackson Hole conference in late August.

Hayes predicts that between now and the Jackson Hole conference, the market will trade sideways to slightly lower. If the Treasury General Account refill proves to be dollar liquidity negative, Bitcoin could drop to $90,000 to $95,000. If the refill has no significant impact, Bitcoin will likely trade in the $100,000s without a decisive break above the $112,000 all-time high.

Hayes criticizes financial advisers who recommend bonds on the premise that yields will fall, stating that those who wait for the Federal Reserve to announce quantitative easing will miss out on significant gains. He advises investors to go long on Bitcoin and JPMorgan stock, arguing that the political machinery supporting US deficits has already chosen bank stablecoins as the next round of stealth quantitative easing. Bitcoin, along with JPMorgan stock, is positioned to benefit from the resulting liquidity spillover.

Hayes concludes with a strong call to action, urging investors not to wait for the Federal Reserve to bless the bull market. He believes that the liquidity horse has already bolted, and those who hesitate to buy Bitcoin risk being left behind. “You will miss out on Bitcoin pumping 10x to $1 million,” he warns.