Bitcoin is witnessing a 16-year high in 30-year U.S. government bond yields, and money printing is all but guaranteed: Arthur Hayes

U.S. debt sees its own "Uptober"

The U.S. continues to add to its record-high national debt at an astonishing pace. Two weeks after the debt tally passed $33 trillion for the first time, the government increased its total by $275 billion in just one day.

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U.S. treasury yields are “screaming higher,” and with that, Arthur Hayes believes that a macroeconomic flashpoint is only a matter of time. The reason comes in the form of a so-called “bear steepener” — a phenomenon that describes long-term interest rates rising more quickly than short-term ones.

Given the current steep rise in the 2s30s curve — the difference between the 30-year and 2-year yields — combined with rising long and short-term interest rates, the pressure across the economy is rising.

In an X thread on Oct. 4, Arthur Hayes, former CEO of crypto exchange BitMEX, eyed ballooning yields as precursor to a new Bitcoin and crypto bull market.

Source: X/CryptoHayes

The result should be clear — a return to mass liquidity injections, counteracting the quantitative tightening seen since late 2021 which has pressured crypto markets.

An accompanying chart showed Bitcoin’s relationship with treasury yields.

“That would be THE major catalyst for the Bitcoin bull market,” he commented about a theoretical return to money supply expansion.

Treasury yields vs. BTC/USD annotated chart. Source: Philip Swift/X