Arthur Hayes: Treasury Repo and Unlimited Money Printing Are Rocket Fuel for Bitcoin

The crypto market is closely watching every shift in U.S. fiscal policy. In a recent interview, Arthur Hayes pointed out that pressures in the U.S. Treasury bond market are driving a new round of liquidity release, which could become the core driver for gains in Bitcoin and other crypto assets.

Treasury Repo Is a Liquidity Signal

Hayes believes that the U.S. Treasury's announcement to expand its long-term treasury bond repo program is itself a signal of monetary easing. Although the repo amounts are not huge, the policy intent is clear: when the 10-year treasury bond yield approaches 5%, authorities will step in.

"They cannot allow yields to keep rising, because that means government debt interest costs spiral out of control," Hayes explained. In his view, this operation resembles the policy atmosphere before the 2008 financial crisis, but this time the goal is to maintain stability in the treasury bond market, not to rescue banks.

FIMA Repo: The Channel for Unlimited Money Printing

What draws even more of Hayes's attention is the Fed's potential expansion of the FIMA repo facility. This tool allows foreign central banks to obtain dollar liquidity from the Fed using U.S. treasury bonds as collateral, without needing to sell those bonds directly in the market.

"If major holders like Japan and Germany start selling off their U.S. treasury bonds at scale, the U.S. financial market would face a huge shock," Hayes said. "The FIMA repo is designed for this scenario—the Fed prints money, foreign central banks get dollars, and the treasury bonds stay on the Fed's balance sheet."

He believes that expanding this facility would be an even stronger signal than treasury bond repo, meaning the door to unlimited money printing is opening. Once officially announced, risk assets like Bitcoin could see rapid gains.

Bitcoin Is the "Pressure Relief Valve" for Money Printing

In Hayes's framework, Bitcoin is the purest "pressure relief valve" for central bank currency over-issuance. When the market starts worrying about the U.S. implementing yield curve control, funds will pour into scarce assets like Bitcoin.

"This is the logic behind Bitcoin's birth after 2008," he said. "When government debt loses credibility, people need an asset that cannot be diluted at will. Bitcoin is that asset."

He expects that if the FIMA repo facility is officially expanded, Bitcoin's price could quickly break through $100,000, or even move higher. But he also stressed that this is a deduction based on liquidity logic, not a certain price prediction.

Ethereum: An Undervalued "Laggard Asset"

Among major crypto assets, Hayes expressed a relatively optimistic view on Ethereum. He noted that Ethereum is the only major crypto asset that has not yet broken its 2021 all-time high, while other large tokens have already set new records.

"Ethereum has the largest developer community and the most mature stablecoin ecosystem," he said. "In a liquidity-driven market, laggard assets often have room to catch up."

He also mentioned that he does not rely on technical analysis, but focuses more on macro liquidity and market sentiment. For Bitcoin, he considers $60,000, $100,000, and the previous high of $25,000 as important psychological levels.

Regulation Is Not the Key Variable

Regarding U.S. crypto regulatory legislation, Hayes remains skeptical. He believes what truly drives Bitcoin up is not regulatory clarity, but continued monetary easing.

"Bitcoin has never needed regulatory approval since 2009," he said. "What it needs is for the Fed to keep printing money."

He advises watching changes in liquidity tools like FIMA repo and treasury bond repo, rather than legislative progress in Washington.

Flop Network: Compute Currency for AI Agents

Hayes also introduced his new project, Flop Network. The project aims to create a compute market denominated in floating-point operations (FLOP) and issue a native token as the payment medium for the AI agent economy.

"AI agents need to 'eat' compute, just like humans need food," he explained. "If there is a currency that can be directly exchanged for compute, it could become the universal currency of the agent economy."

Flop Network plans to incentivize early participants through airdrops and testnet rewards, without a public presale. Hayes said the project will either become the core currency of the agent economy or go to zero—a classic binary bet.

Risks and Uncertainties

Despite his long-term optimism for the crypto market, Hayes also acknowledges extreme risks. War, cyberattacks, or social collapse could lead to power outages, which would affect the security of crypto assets.

"In that scenario, what you need might be physical gold and weapons, not digital currency," he said.

For ordinary investors, he advises patience, continuous learning, and understanding the cruelty of the market: "The market is here to take your money, not to give you money."