Crypto Ready for ‘Up Only’ Mode: Arthur Hayes’ Bold Prediction Sparks Optimism and Doubts

Crypto Ready for ‘Up Only’ Mode is the phrase catching attention after Arthur Hayes, co-founder of BitMEX, claimed the market will turn bullish once the U.S. Treasury General Account (TGA) is replenished to $850 billion.

Hayes believes that with the liquidity drain complete, funds will flow back into private financial markets, and crypto will be one of the biggest beneficiaries.

On Friday, Hayes noted that the U.S. TGA already crossed $807 billion, putting the target milestone in sight. “With this liquidity drain complete, up only can resume,” he wrote. The TGA, essentially the U.S. Treasury’s account at the Federal Reserve, temporarily removes liquidity from circulation as funds are accumulated. Once the $850 billion level is reached, Hayes expects the flow to reverse, re-injecting liquidity into markets.

However, not everyone agrees with Hayes’ crypto ready for ‘up only’ mode outlook. André Dragosch, European head of research at Bitwise, dismissed the theory, saying, “Net liquidity has a loose correlation to Bitcoin and crypto at best. Think that is a useless banana in my view.” His skepticism highlights that not all analysts buy into the idea that Treasury operations alone can sustain a lasting rally.

Fed rate cuts add another twist

Hayes’ prediction comes just days after the U.S. Federal Reserve delivered its first rate cut since 2024, lowering borrowing costs by 25 basis points to 4.00–4.25%. Bitcoin initially slipped below $115,000 in a classic “sell-the-news” move but later stabilized near $116,000.

The Fed’s policy path is a key factor alongside the TGA. Chairman Jerome Powell noted divisions within the Federal Open Market Committee (FOMC) on further cuts in 2025. Still, CME FedWatch data shows 91.9% of traders now expect a 50-basis-point reduction at the October meeting. Easier policy could reinforce Hayes’ thesis that crypto ready for ‘up only’ mode is more than just a slogan.

Why liquidity matters for crypto

Liquidity injections, whether from government operations or Fed policy shifts, tend to favor risk assets like Bitcoin. Hayes argues that vast sums currently parked in money market funds, combined with falling rates, could unleash fresh demand for digital assets. “A powerful surge” could follow once liquidity flows back into private markets, he suggested.

But risks remain. Hayes himself admitted that if the TGA refill is mishandled, Bitcoin could temporarily drop to the $90,000–$95,000 range. Others, like gold advocate Peter Schiff, continue to warn that crypto’s rally will falter in the face of stagflation and stronger hard-asset demand.

The bigger picture

Beyond liquidity, Hayes also pointed to regulated bank-issued stablecoins as a potential game-changer. Unlike USDT or USDC, these instruments could allow deposits into short-term Treasuries without capital charges, effectively creating a new form of quantitative easing. If adopted, this could further expand crypto’s liquidity base.

For now, the market remains divided. Bulls echo Hayes’ crypto ready for ‘up only’ mode narrative, betting on liquidity and dovish Fed policy to drive Bitcoin toward fresh highs. Skeptics, however, argue that macroeconomic headwinds and political uncertainty could cut the rally short.

Either way, the $850 billion TGA target has become the next milestone to watch. Whether it ignites the “up only” phase Hayes envisions, or simply sparks another round of debate, will depend on how liquidity, rates, and investor sentiment align in the months ahead.