With the release of the Term Bank Financing Program (BTFP), analysts point out that the US central bank has already injected $300 billion to bail out banks like Signature and Silicon Valley Bank. However, that amount could be as high as $2 trillion.
For Arthur Hayes, founder of BitMex, the “BTFP is the global go-ahead for printing infinite money.” Moving on, the billionaire claims that Bitcoin will not only skyrocket, but also upset many people.
“Bitcoin’s rally will be one of the most hated of all time.”
“How can Bitcoin and cryptocurrency markets bounce back after all the bad things that happened in 2022?”continues billionaire Arthur Hayes. “Haven’t people learned that Bitcoin and the people associated with it are villains? Aren’t people afraid of the story that Bitcoin caused major bank failures and nearly swallowed up the US banking system?”
Banks have lost $620 billion since the Fed hiked interest rates
Using the same information as Balaji Srinivasan, an executive who is betting that Bitcoin will reach $1 million in 90 days, Arthur Hayes points to the size of the financial gap for US banks.
In total, these institutions have lost US$620 billion (R$3.2 trillion) since the Fed started raising interest rates.
While Bitcoin has also suffered from rising interest rates, the situation has turned around in the past week. With banks going to ruin even outside the US, as is the case with Swiss giant Credit Suisse, Bitcoin has boomed.
However, this rise seems to be just the beginning. After all, both the Fed and other central banks will have to inject a lot of money to bail them out. That is, those who benefit are scarce assets, such as gold and especially Bitcoin.
No caps on Fed schedule, warns Arthur Hayes
As for the BTFP, Arthur Hayes points out that the Fed has no cap on bailing out failing banks.
“There are no size restrictions. If your bank has $100 billion in Treasury Bills (UST) and Mortgage Backed Contract (MBS), you can send that entire amount to be funded with BTFP”writes Hayes. “This means that the Fed could theoretically make loans against all of the UST and MBS stocks that are on the balance sheets of US banks.”
“The previous two sections on the BTFP are important to understand. The Fed just conducted $4.4 trillion of quantitative easing (QE) under a different guise.”
By comparison, Hayes claims the US Federal Reserve printed $4.2 during the Covid-19 pandemic. That is, this new impression associated with bank rescues may be even greater.
“During the COVID money printing episode, Bitcoin surged from $3,000 to $69,000. What will he do this time?”
The full text by Arthur Hayes, in English and with an estimated reading time of 31 minutes, can be found on his personal blog.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
