According to former BitMEX CEO Arthur Hayes, the fights over the US debt ceiling are causing marked cash swings that are moving markets. When the Treasury Department issues its main checking account — the Treasury General Account, or TGA — new dollars enter the system and lift risky assets.
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Later, when the Treasury replenishes the TGA by selling debt, the money will be withdrawn and the pressure will return to stocks and crypto, he said.
Hayes cites 2023 as a clear example, when a large amount of money from the Fed’s reverse repo facility – about $2.5 trillion – was available to be drawn back into the markets.
Market statistics and recent movements
Traders can see the effects of price action. Bitcoin’s recent decline towards the $80,000 area followed a period of tighter liquidity, and its recovery above $91,000 has many investors wondering whether the sell-off marked a cycle low.
The crypto market gained ground on Monday, with total capitalization rising to just over $3 trillion, up 1.2% in the past 24 hours. Bitcoin rose to $92,120, up 1.50% on the day and nearly 6.5% higher for the week.
Ethereum was trading around $3,160, after a daily increase of 4% and a weekly increase of 11%. Reports have revealed that these moves are happening as traders monitor large dollar flows linked to US Treasury transactions and central bank balance sheet moves.
Smaller last-day gains are offsetting larger weekly returns for several top tokens, showing that swings remain large but buying interest has resurfaced.
Why 2025 will look different
Based on reports, Hayes says 2025 is not the same as 2023. The reverse repo balances that fueled the earlier rally are largely gone, and liquidity shrank by nearly $1 trillion between July and the end of 2025 as the Treasury issued debt and the Fed implemented quantitative tightening.
That drought of available cash has been a headwind for risky assets and helped push prices down. The mechanism is simple: Less money chasing assets usually leads to fewer bids and a bigger price drop.
Price response and cross-market effects
The liquidity story is not limited to crypto. Stocks, gold and real estate responded to the same flow shifts during the previous cycle.
Hayes estimates that approximately $2.5 trillion of liquidity was effectively redistributed from the Fed facilities to the markets in 2023, boosting gains across all asset classes. When that source was absent in 2025, selling pressure increased and volatility increased.
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Favorable market conditions
Hayes says the environment has changed in a positive way. The Fed has suspended quantitative tightening, liquidity pressures in the Treasury market are easing, the TGA is close to where officials want it to be, and banks are starting to reopen lending.
He views the decline towards $80,000 as the low in the cycle and expects upward pressure as cash conditions improve. In his view, these factors combine to create the environment for renewed advantage.
Featured image from Unsplash, chart from TradingView