Arthur Hayes, co-founder and former CEO of the cryptocurrency exchange BitMEX, contended in a Substack essay released on Friday that the Federal Reserve’s new “reserve management purchases” (RMP) initiative is essentially a rebranded version of quantitative easing.
Hayes maintains that by purchasing short-term Treasury bills and recycling liquidity through money markets, the Fed is, in fact, financing government expenditures while sidestepping the political stigma associated with quantitative easing, even as officials present the program as a technical liquidity operation.
“The RMP is a thinly concealed method for the Fed to cash the government’s checks. This is highly inflationary from both a financial and real goods/services perspective,” he stated.
Hayes noted that initiatives like RMP increase fiat liquidity and, in his opinion, benefit scarce resources such as Bitcoin, gold, and silver.
I appreciate QE because it signifies money creation, and fortunately, I hold financial assets like gold, gold/silver mining stocks, and Bitcoin that appreciate faster than the rate of fiat money generation.
Conversely, he cautioned that individuals without assets suffer, as money printing diminishes purchasing power, weakens wages in relation to prices, and redistributes wealth towards asset holders.
“Sadly, for most of humanity today, money printing undermines their dignity as productive individuals,” he expressed. “When the government deliberately reduces the value of the currency, it severs the connection between energy inputs and economic outputs.”
Related: Bitcoin rebounds on Japan rate hike as Arthur Hayes forecasts dollar at 200 yen
Polymarket indicates a pause following December rate reduction
On December 10, the Federal Open Market Committee (FOMC) reduced interest rates by 25 basis points and announced purchases of short-term Treasury securities, a decision Fed Chair Jerome Powell indicated was “exclusively for maintaining an ample supply of reserves” and distinct from the monetary policy stance.
The Fed specified that the purchases would initially reach approximately $40 billion in the first month and could remain high for several months to alleviate short-term pressures in money markets, especially concerning seasonal variations like tax payments.
Despite the rate cut and the announcement of short-term Treasury acquisitions, analysts remarked that mixed signals from Powell are likely to hinder a sustained Bitcoin rally until the rate-cutting cycle resumes in 2026.
On December 10, Bitcoin’s price was about $92,695, according to Yahoo Finance data. It was trading around $87,300 at the time of this writing.
At the time of writing, Polymarket traders were overwhelmingly anticipating no change in Fed policy for January, with the probability of rates remaining unchanged at about 77%, while the chance of a further 25 basis point cut rests near 21% and larger adjustments are considered highly improbable.
Powell’s term is set to conclude in May 2026. US President Donald Trump, who has publicly advocated for the next Fed chair to implement aggressive interest rate reductions, is preparing to interview candidates to succeed him, with National Economic Council Director Kevin Hassett widely considered the frontrunner.
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