Hayes Bets TGA Refill Will Fuel Crypto Rally Despite Skepticism

Arthur Hayes, co-founder of BitMEX, has asserted that crypto markets are poised to enter an "up only" mode once the U.S. Treasury General Account (TGA) reaches its $850 billion refill targetArthur Hayes, *Crypto ready for 'up only' mode once US TGA hits $850B target*^[1]. The TGA, the U.S. Treasury’s primary bank account at the Federal Reserve, has been a focal point for liquidity dynamics. Hayes argues that as the TGA nears its target, the liquidity drain caused by Treasury debt issuance—designed to absorb cash from the financial system—will reverse, injecting capital into marketsChristina Comben, *With the Treasury General Account refill almost done, ‘up only can resume’*^[2]. This process, he claims, will create favorable conditions for crypto assets, which have historically thrived under loose monetary policy.

The TGA refill, initiated in 2025, has already drawn liquidity out of the system through the sale of Treasury bills and bondsChristina Comben, *With the Treasury General Account refill almost done, ‘up only can resume’*^[2]. When the account is refilled, the funds remain sequestered, reducing market liquidity and potentially dampening asset prices. Hayes highlighted that the TGA currently stands at $807 billion, with the $850B threshold expected to be hit soonArthur Hayes, *Crypto ready for 'up only' mode once US TGA hits $850B target*^[1]. Once this occurs, the liquidity previously absorbed by the Treasury could flow back into private markets, including crypto, potentially fueling a rally. However, not all analysts agree. André Dragosch, European head of research at Bitwise, dismissed the link between net liquidity and crypto, calling it a "useless banana" in his viewArthur Hayes, *Crypto ready for 'up only' mode once US TGA hits $850B target*^[1].

The Federal Reserve’s recent policy shifts further complicate the outlook. On September 17, 2025, the Fed cut interest rates by 25 basis points, marking its first reduction since December 2024*Fed’s Sept. 17 Rate Decision: How a 0.25% Cut Could Reshape*^[6]. This move, coupled with expectations of further cuts, has sparked optimism in crypto markets. Bitcoin dipped slightly after the announcement, a classic "sell the news" reaction*Fed’s Sept. 17 Rate Decision: How a 0.25% Cut Could Reshape*^[6], but the broader trend suggests easing financial conditions could benefit risk assets. Hayes noted that the Fed’s rate-cutting cycle, combined with trillions in idle capital parked in money market funds, could drive a "ferocious rally" in crypto once liquidity flows resumeChristina Comben, *With the Treasury General Account refill almost done, ‘up only can resume’*^[2].

Market participants are closely monitoring the interplay between TGA dynamics and Fed policy. The CME Group reported that 91.9% of traders anticipate a 50-basis-point rate cut at the next FOMC meeting in OctoberArthur Hayes, *Crypto ready for 'up only' mode once US TGA hits $850B target*^[1]. This dovish stance aligns with Hayes’ thesis that lower rates reduce the opportunity cost of holding non-yielding assets like Bitcoin. However, risks persist. Hayes warned that a poorly managed TGA refill could trigger a short-term Bitcoin dip to $90,000–$95,000*Bitcoin could retest $90K as Trump's Big Beautiful Bill sets stage*^[3], particularly if market participants view the liquidity shift as a temporary blip rather than a sustained tailwind.

The debate extends beyond liquidity. Hayes also emphasized the potential impact of regulated, bank-issued stablecoins, which he described as a novel mechanism for injecting liquidity into the systemArthur Hayes, *Arthur Hayes Warns of Bitcoin Dip Amid Fed and TGA Moves*^[4]. Unlike existing stablecoins like USDT or USDC, these new tokens could facilitate deposits into short-term Treasury bills without incurring capital penalties, effectively acting as a form of quantitative easingArthur Hayes, *Arthur Hayes Warns of Bitcoin Dip Amid Fed and TGA Moves*^[4]. This development, if materialized, could further amplify liquidity for crypto markets.

While the bullish case hinges on liquidity and policy easing, skeptics caution against overreliance on macroeconomic factors. Peter Schiff, a vocal critic of Bitcoin, argued that the asset is "topping out" relative to gold and that stagflation risks could undermine its long-term appeal. Additionally, altcoins remain vulnerable to volatility, with some analysts predicting sharper corrections than Bitcoin during periods of macro uncertainty.

The path forward remains contingent on several variables. The success of the TGA refill, the pace of Fed rate cuts, and the regulatory environment for stablecoins will all shape the crypto market’s trajectory. Hayes’ "up only" scenario requires a smooth transition from liquidity drain to surge, with minimal market panic. If realized, this could see Bitcoin targeting new all-time highs, particularly if institutional adoption of spot ETFs continues to accelerate.