Arthur Hayes: The Federal Reserve has entered an era of "fiscal dominance," and the recovery of dollar liquidity will drive Bitcoin stronger

ChainCatcher news, BitMEX co-founder Arthur Hayes published a lengthy article, using the form of a satirical novel to point out that Federal Reserve Chairman Powell is trapped in a fiscally dominated "forced compliance" pattern, and his shift to loose monetary policy has become inevitable. He emphasized that the Federal Reserve will be forced to restart quantitative easing (QE) to cover the massive fiscal deficit of the United States, and the resurgence of dollar liquidity will drive Bitcoin stronger.

Hayes analyzed that although the market is still debating the pros and cons of tariffs, what the crypto market should truly celebrate is the imminent return of QE. He expects this process to begin this summer and noted that the Federal Reserve slowing down the pace of QT is a signal being released.

He concluded that fiscal dominance means the Federal Reserve will abandon its independence, prioritizing ensuring that the government can finance itself at affordable interest rates, which is the core reason for persistently high inflation. In the face of a new round of capital release, Bitcoin will benefit in the long term due to its "digital gold" properties.