Arthur Hayes: Fed’s RMP Is Stealth QE — Liquidity Boost to Bitcoin and Scarce Assets
Arthur Hayes, BitMEX co‑founder, argues the Federal Reserve’s Reserve Management Purchases (RMP) functions as a form of stealth quantitative easing. The Fed’s RMP buys short‑term Treasury bills (about $40 billion initially) to maintain ample reserves, increasing fiat liquidity without changing headline policy rates and effectively recycling funds through money‑market plumbing. Hayes says this hidden liquidity expansion helps finance government spending, expands the money supply, and favors scarce assets such as Bitcoin, gold and precious‑metals miners. Market context: Bitcoin traded near $92,695 on Dec. 10 before slipping toward $87,300 at the later report; Polymarket probabilities pointed to a high chance of no Fed policy change in January. Key trader takeaways: treat RMP as stealth QE — monitor Fed communications and reserve/liquidity signals; expect continued upside pressure on BTC and other scarce assets if liquidity persists; non‑holders face purchasing‑power erosion, while asset holders may benefit. Primary keywords: Federal Reserve, Reserve Management Purchases, quantitative easing, Bitcoin, liquidity.
Bullish
Hayes frames RMP as stealth QE that expands base money and recycles liquidity into money markets. For Bitcoin specifically, increased fiat liquidity and potential dollar weakness historically correlate with upside pressure for scarce assets. Short term: announcement and early purchases can boost risk appetite and trigger rallies as traders reposition for liquidity-driven flows; volatility may spike around Fed communications and macro updates. Medium/long term: persistent RMP purchases that keep reserves ample could sustain a looser liquidity backdrop, supporting continued appreciation for BTC versus fiat and increasing institutional appetite for scarce assets. Risks that temper the bullish view include potential rapid policy reversals, higher‑than‑expected inflation leading to rate hikes, or a sudden loss of confidence that tightens financial conditions. Overall, given the RMP’s liquidity bias and Hayes’ argument, the net price impact on Bitcoin is likely bullish, especially while markets price low near‑term probabilities of Fed tightening.