Arthur Hayes: Scott Bessent Is 'Yellen 2.0' and Bitcoin Is the 'Liquidity Smoke Alarm'

Treasury Secretary Scott Bessent is “Yellen 2.0,” according to Maelstrom founder Arthur Hayes, who on Tuesday argued that Bitcoin (CRYPTO: BTC) is already detecting the “money printing to come.”

Why Does Hayes Compare Bessent to Yellen?

Hayes wrote in a Substack essay that both former Treasury Secretary Janet Yellen and Scott Bessent faced the same problem: a 10-year Treasury yield approaching 5% that makes mortgages, corporate debt and consumer financing prohibitively expensive.

Both responded by finding ways to inject dollar liquidity without calling it money printing.

Yellen’s move in late 2023 was flooding the market with T-bills, pulling $2.4 trillion out of the Fed’s Reverse Repo Program into the banking system where it could be recycled into financial markets. 

Bitcoin rallied hard off its FTX lows directly after that injection. Bessent is running the same playbook by doubling long-end bond buybacks while the Fed’s Reserves Management Program quietly prints money to absorb T-bill issuance on the other side.

Why Is the Bond Market’s Pushback Actually Bullish?

Bessent’s Aug. 19 buyback announcement pushed 10-year yields lower for exactly one trading session before they climbed back above pre-announcement levels. 

Hayes said the $20 billion increase was too small against a $40 trillion debt stock — but argued the market’s pushback forces Bessent to go bigger. 

Bitcoin read the signal immediately and rallied hard, which Hayes called Bitcoin functioning as the global “liquidity smoke alarm.”

What Bessent’s Next Move Looks Like

Hayes laid out three scenarios, ranging from aggressive intervention to political restraint:

• Best case for Bitcoin: Bessent announces unlimited buybacks of 10-year-plus bonds above 5%, similar to the Bank of Japan’s yield curve control, forcing the market to respect the ceiling
• Most likely path: Bessent increases buybacks gradually while tapping other programs, including potentially draining the Treasury General Account, which holds roughly $1 trillion
• Worst case: Politicians choose to spend less — which Hayes called unlikely given midterm elections just weeks away

How Hayes Is Positioning Maelstrom

Hayes put Maelstrom at maximum risk across Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), Ethena (CRYPTO: ENA), and Ether.fi (CRYPTO: ETHFI), calling this the start of a bull market regardless of whether Bessent moves fast or slow.

Key catalysts include Nvidia earnings and July core PCE on Wednesday, and Fed Chair Kevin Warsh’s Jackson Hole keynote on Friday.

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