Why did Arthur Hayes liquidate his bitcoin holdings when the U.S. Treasury balance hit bottom?

Recently, meme coins ArbDoge AI (AIDOGE) and PEPE (PEPE) detonated money-making effect, with Bitcoin and Ethereum short jump, announced the market into correction. On the one hand, retail investors are fighting for their lives in these head drops, on the other hand, local dogs are playing devil's tricks, and pent-up funds are venting their money-making effects. There is no main line in the market.

As the market falls, people start looking for macro clues, and the imminent bottom of the US Treasury Account balances (TGA) comes into view. Arthur Hayes, the founder of BitMex, said in a blog post announcing his addition on February 7 that he would liquidate his bitcoin position when the Treasury TGA reached its bottom. Some people are joking that Arthur Hayes finally got it right. What's the mechanism?

The principle of "fluid" narrative

The latest data show that the balance of the US Treasury account (TGA) is less than 100 billion dollars, and the US tax revenue in April is lower than expected. Arthur Hayes believes that if the current fiscal is not enough to pay the interest on the US debt, the market expects the US to raise the US debt ceiling of 31.4 trillion dollars in the second half of this year. The re-issuance of US bonds will drain dollar liquidity from the market, so it will be bad for risk assets and therefore negative for Bitcoin.

It could also be argued that the decline is a hedge against the news day, with previously hawkish Fed Governor Janet Waller and Cleveland Fed Chair Loretta Mester also due to speak on those two days.

When "liquidity" promoted crypto market biggest narrative

In March, PPI fell, but core CPI rose more than expected. Why?

The positive PPI data, that is, the decline of industrial purchasing price, indicates that the international supply chain problems caused by the epidemic have been solved, while the higher than expected core CPI is closely related to the relocation of the US manufacturing industry caused by decoupling. The grassroots labor cost in the US is the root cause of the high core CPI. In the current context of inevitable decoupling, interest rate rises and cuts are no longer just about the rise and fall of the tech sector, but are part of a larger picture.

There's a saying among crypto market investors: Find the next narrative.

However, when the Silicon Valley bank explosion opens the small rise of bitcoin, when the LSD track is trapped in the homogeneity of the inner volume, when a number of Layer2 in a wave of small market even can not go out of half the space, superposition the decline of blue chip NFT, we should see the market's weakness to the "crypto narrative".

Perhaps it's the 2022 path dependency, perhaps it's grasping at straws in a spiritually starved market, but let's face it, "let's go and raise rates" has become the overriding narrative that dominates the crypto market today. When the real analysis becomes the narrative, the evolution of the market has been divorced from the facts, if the blindly delve into the inflection point of interest rate hike and release of water, it will inevitably become the fuel for the narrative.

After all, before the release of water, the release of water market has a reason to exist.

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