Former BitMEX CEO Arthur Hayes has a clear message for Bitcoin investors glued to every move the Federal Reserve makes: You’re focusing on the wrong institution.
“The real show is at the Treasury Department. Ignore the Fed. It doesn’t matter,” Hayes told CoinDesk in a recent interview. “Powell didn’t matter in 2022 under a Democratic regime, and he doesn’t matter now under a Republican one.”
According to Hayes, the Fed has been reduced to a sideshow. The true driver of global liquidity, he argues, is Treasury Secretary Scott Bessent, whose aggressive buyback programs and auction tactics are quietly fueling a flood of dollars to manage the ballooning U.S. debt.
This excess liquidity—combined with Washington’s inability to cut spending—is what Hayes believes will propel Bitcoin (BTC) to $1 million by 2028.
“All we care about is whether there are more dollars in the system today than yesterday,” he said. “That’s all that matters.”
Hollow Diplomacy, Real Consequences
But in Hayes’ view, it’s not just monetary policy that’s setting the stage. Geopolitical posturing—particularly the ongoing U.S.-China trade negotiations—is adding more fuel to the fire.
He believes both nations will likely sign a largely symbolic agreement that’s more about optics than substance.
“It’s going to be a deal on the surface,” Hayes said. “Trump needs to prove he’s been tough on China. Xi needs to prove that he stood up to the white man.”
China, he argues, has shown it can endure economic pain, as demonstrated by its rigid COVID-era policies. But with new tariffs being politically risky in the U.S., Hayes expects Washington to lean on subtler tools—such as taxing foreign investments—to reduce dependence on international capital without alarming domestic voters.
Capital Controls Are Coming
In Hayes’ view, America is inching closer to capital controls—the only policy, he claims, that actually works.
“Whether it’s taxes on foreign-held Treasuries or equities, or more extreme measures like forced bond swaps or higher capital gains withholding taxes on U.S. assets, the playbook is expanding,” he said.
The goal? Rebalance America’s financial account without telling voters they need to consume less—an idea no politician wants to sell.
“Americans don’t like to do hard things,” Hayes said bluntly. “They don’t want to be told that you have to consume less.”
China Can’t Stop Buying U.S. Assets
Despite the friction, Hayes says China has little choice but to continue buying U.S. assets—even if it tries to mask it.
“They have to obfuscate how much stuff they’re buying off America… but mathematically, they just can’t stop.”
Betting on the Spillover
For Hayes, this all points to one inevitable outcome: more liquidity flooding the system, with Bitcoin absorbing the excess.
He’s positioned accordingly—allocating 60% to 65% of his portfolio to Bitcoin, 20% to Ethereum (ETH), and the rest to what he calls “quality shitcoins.”
“We are in fundamentals season,” Hayes said. “People are tired of coins that don’t do anything.”
