Arthur Hayes, co-founder and former CEO of the BitMEX platform, shared his views on the latest state of the cryptocurrency market.
Arthur Hayes believes that the rally we are seeing now is a result of Fed policy. The American entrepreneur, in his market assessment on his Twitter account: “As expected, the liquid NPL continues to fall.” used his statements.
“The Rally Can Continue As Long as the QT Rate Does Not Change”
In this post, Arthur Hayes mentions that the Treasury General Account (TGA) continues to fall as expected. This is seen as a positive development in terms of liquidity, as the decrease in NPL could potentially increase the cash and other liquid assets supply in the economy.
Stay focused. As expected the TGA continues to decline which is $liq +ve. This risk rally has room to run unless the Fed wants to alter its pace of QT. pic.twitter.com/wgGmZPbWau
— Arthur Hayes (@CryptoHayes) February 17, 2023
The phrase “liq+” in the post shared by Hayes is an abbreviation for the positive phrase liquidity. In other words, it means that the decrease in NPL is seen as a positive development for the liquidity in the financial system.
The phrase “there is room for this risk rally to continue unless the Fed wants to change the pace of the QT” indicates that the decline in NPL could contribute to a risk rally in the financial markets, which could continue without the Federal Reserve’s rate cut. Quantitative tightening (QT) refers to the process of reducing the size of the Federal Reserve’s balance sheet by selling assets such as treasury securities.
The statement means that if the Federal Reserve slows or reverses its QT program, it could potentially have an impact on risk rally and financial markets more broadly. This is because the speed of QT can affect the supply of treasury securities in the market, which in turn can affect interest rates, liquidity and other financial market conditions.
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