BitMEX co-founder Arthur Hayes believes that Bitcoin (BTC) will soon start printing rallies due to one main catalyst.

In a new blog post, Hayes says that Fed chair Jerome Powell’s recent comments on monetary policy indicate market liquidity will start to increase, which has ignited massive Bitcoin rallies in the past.

According to Hayes, the Fed will start to transition from quantitative tightening (QT) to quantitative easing (QE), beginning with its policy on US Treasury bonds.

QE is a monetary policy used by central banks to prop up the economy by printing more money to accumulate financial assets. New money flows into the financial system, boosting spending and investments.

“Powell proved last [month] that fiscal dominance is alive and well. Therefore, I am confident QT, at least regarding Treasuries, will stop in the short to medium term. Going further, Powell stated that while the Fed may maintain mortgage back security runoff, it will net buy Treasuries. Mathematically, that keeps the Fed balance sheet constant; however, that is Treasury QE. Bitcoin will scream higher once this is formally announced. Furthermore, because the banks and the Treasury demand it, the Fed will grant the SLR (Supplementary Leverage Ratio) exemption for the banks, which is another form of Treasury QE.”

Hayes believes Bitcoin remains on track to hit $250,000 by the year’s end if the Fed shifts to QE.

“If my analysis of the Fed’s major pivot from QT to QE for Treasuries is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end. Of course, this is not an exact science, but using the gold example, if I had to place a bet on whether I thought Bitcoin would hit $76,500 or $110,000 first, I would bet on the latter. Even if US stocks continue falling in reaction to tariffs, a collapse in earnings expectations, and or foreigner demand waning, I am confident that the odds favor Bitcoin continuing to climb higher.”

Bitcoin is trading for $82,702 at time of writing, down 3.2% in the last 24 hours.

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