Maelstrom founder Arthur Hayes shared insights on possible cryptocurrency market changes leading up to the Jackson Hole symposium.
Short-Term Liquidity Pressure on Cryptocurrencies
In his Medium article, Hayes evaluates that following the increase in the debt ceiling, the Treasury General Account's completion to $850 billion will temporarily reduce circulating dollar amounts. He warns of a potential pullback of Bitcoin after its current peak tests, seeking support in the $90,000 to $95,000 range. However, the symposium might spark recovery as early as September if Fed Chair Jerome Powell hints at easing quantitative tightening.
Trillion-Dollar Potential
Hayes associates the support of U.S. Treasury Secretary Scott Bessent for stablecoin regulation with the need to control borrowing costs. This regulation allows numerous too-big-to-fail (TBTF) banks to issue stablecoins, directing deposits amounting to $6.8 trillion toward treasury securities.
Impact of Stablecoin Regulation
According to the Maelstrom founder, the removal of interest payments by the Fed on bank reserves could generate an additional $3.3 trillion in demand. He regards the total potential of $10.1 trillion as a new version of the 'Activist Treasury Issuance' model proven successful since 2022.
Arthur Hayes emphasizes that forthcoming regulatory changes may significantly impact the cryptocurrency market, particularly Bitcoin, creating potential for long-term growth.
