The crypto market is showing steady strength, with total market capitalization climbing to $3.09 trillion, up 1.1% in the last 24 hours. Bitcoin has risen to $91,119, gaining 1.55% on the day and nearly 6% over the week. Ethereum is also performing well, trading at $3,112 after a 1.87% daily increase and a 10% weekly jump.
Former BitMEX CEO Arthur Hayes has predicted that Bitcoin is entering one of its strongest bullish phases , driven by a shift in U.S. liquidity conditions. In a recent interview, Hayes said the setup in late 2025 looks very similar to the liquidity surge that pushed Bitcoin sharply higher in the second half of 2023.
Hayes explained that both in 2023 and 2025, the U.S. went through political battles over the debt ceiling. During these fights, the Treasury is forced to spend down its main checking account—called the Treasury General Account (TGA). When the government spends from the TGA, it injects fresh dollars into the financial system. This extra liquidity usually lifts markets, including Bitcoin.
But when the debt ceiling is finally raised, the government has to refill the TGA by issuing new debt. That process pulls liquidity out of the system and typically hits risky assets like stocks and Bitcoin.
In 2023, the Treasury filled the TGA by issuing short-term debt, but it had a major advantage: the Federal Reserve’s reverse repo facility still held about $2.5 trillion from the pandemic era. By issuing high-yield short-term Treasury bills, the government lured that money out of the Fed and back into markets.
Hayes said this move pumped $2.5 trillion of fresh liquidity into the economy from mid-2023 to early 2025, fueling huge rallies in Bitcoin, stocks, gold, and real estate.
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In 2025, the debt ceiling was raised again and the Treasury had to rebuild the TGA. But this time, the reverse repo pool is basically empty. There is no extra $2.5 trillion to tap.
Instead, liquidity tightened by almost $1 trillion between July and late 2025 due to bond issuance and ongoing Federal Reserve quantitative tightening (QT), which shrinks the Fed’s balance sheet.
This liquidity drain hurt Bitcoin and helped push it down toward the $80,000 range.
Hayes says the turning point is now here:
- The Fed has stopped quantitative tightening.
- Treasury liquidity stress is easing.
- The TGA is near its target level.
- U.S. banks are starting to lend again.
Hayes says the recent drop to around $80,000 was the cycle low, and he expects Bitcoin to climb as global liquidity improves.
