Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX, argued in a Substack essay published Friday that the Federal Reserve’s new Reserve Management Purchases (RMP) program is effectively a rebranded quantitative easing.
Hayes argues that by purchasing Treasury bills and recycling liquidity through money markets, the Fed effectively funds government spending while avoiding the political stigma of quantitative easing, even though officials describe the program as a technical liquidity measure.
“The RMP is a cleverly disguised way for the Fed to cash government checks, which is highly inflationary from both a financial and physical goods and services perspective,” he said.
Amount of U.S. Treasury bonds issued by maturity. sauce: macro micro
Hayes said policies like the RMP would expand fiat liquidity and favor rare assets such as Bitcoin, gold and silver.
I love QE because it means printing money, and thankfully I own financial assets like gold, gold/silver mining stocks, and Bitcoin that rise faster than the pace of fiat currency creation.
At the same time, he warned that those without assets would suffer as money creation erodes purchasing power, wages fall relative to prices, and wealth is transferred to asset holders.
“Unfortunately, for most of humanity here and now, printing money is destroying their dignity as productive human beings,” he wrote. “When governments deliberately devalue their currencies, it destroys the relationship between energy input and economic output.”
Related: Arthur Hayes considers dollar to be 200 yen, Bitcoin rebounds due to Japanese interest rate hike
Polymarket points to temporary suspension after December interest rate cut
On December 10, the Federal Open Market Committee (FOMC) cut interest rates by 25 basis points and announced short-term Treasury bill purchases, but Fed Chairman Jerome Powell said this was “solely to maintain an adequate supply of reserves” and was separate from its monetary policy stance.
The Fed said its purchases will total about $40 billion in the first month, but could continue to increase for several months to ease pressure on money markets, particularly around seasonal fluctuations such as tax payments.
Analysts said that despite announcements of interest rate cuts and short-term government bond purchases, Powell’s mixed signals are likely to dampen Bitcoin’s sustained rally until 2026, when the rate-cutting cycle resumes.
According to data from Yahoo Finance, the price of Bitcoin was around $92,695 as of December 10th. As of this writing, it is trading at approximately $87,300.
At the time of writing, polymarket traders are overwhelmingly pricing in no change to Fed policy in January, with a roughly 77% probability of keeping rates unchanged, but the probability of another 25 basis point cut remains close to 21%, making a larger move highly unlikely.
Probability that the Fed will cut interest rates in January Source: Polymarket
Mr. Powell’s term is scheduled to expire in May 2026. U.S. President Donald Trump, who has publicly endorsed the next Federal Reserve chair who would pursue aggressive interest rate cuts, is preparing to meet with the finalists to replace him, with National Economic Council Chairman Kevin Hassett widely seen as the frontrunner.
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