The real reason Bitcoin price exploded this week, according to Arthur Hayes

BitMEX co-founder Arthur Hayes published another macroeconomics piece on Tuesday focusing on why Bitcoin's price has soared so suddenly this week.

The analyst argued that now is the time for crypto traders to move away from US Treasuries and return to BTC.

The speech that pushed bitcoin

According to Hayes, the crypto community is excited about Bitcoin's rally this week due to the potential adoption of the fake US spot Bitcoin ETF. Such excitement occurred earlier last week in response to false rumors, and Bitcoin's price dropped to $27,000 as the rumors died down.

“Bitcoin — along with gold — is struggling against a backdrop of a long-running bullish selloff in U.S. Treasuries,” Hayes wrote. “This is not speculation as to whether the EFF will be approved – this will reduce Bitcoin's future, hyper-inflationary global war scenario.”

Hayes noted that bonds are being sold in response to recent statements from the Federal Reserve and President Joe Biden. On the one hand, the Fed has signaled the end of its interest rate hiking cycle, meaning the market has no more incentive to hold long-term bonds.

On the other hand, Biden has asked Congress to continue funding overseas conflicts in countries like Ukraine and Israel, totaling $105 billion. This caused bondholders to sell off many of their treasures as they doubted the government's ability to finance such a war effort.

It has led investors to place their wealth in gold as an alternative safe-haven asset. Bitcoin, also bullish, is often compared to gold because both assets share many important financial properties.

“Neither gold nor bitcoins provide anything,” Hayes explained. “So if you're collecting at a time when U.S. Treasuries are producing higher yields, that tells me that both safe-haven assets are reducing more government spending and more inflation.”

Time to buy Bitcoin

Over the past year, Hayes has repeatedly argued against continuing to buy US Treasuries due to their high yields until he gets some kind of market signal to return to BTC buying.

While waiting for a “financial explosion” or “Fed pivot” to return to crypto, Hayes said Biden's commitment to “another open conflict” is the trigger for a return.

“It's time to start moving away from short-term US Treasuries and into crypto,” he concluded. “The perfect setup is often staring you in the face, and you're too caught up in the past to notice.”