US Government Reopening Signals Bullish Turn for Bitcoin and Zcash, Says BitMEX Founder Hayes

Market Liquidity Expected to Recover as Treasury Department Shifts Course

In a forecast that has captured the attention of cryptocurrency investors worldwide, BitMEX founder Arthur Hayes has issued a bullish prediction for Bitcoin (BTC) and privacy coin Zcash (ZEC) following the end of the recent U.S. government shutdown. According to Hayes, the reopening of federal agencies is likely to trigger a significant recovery in market liquidity, potentially reversing recent downward trends that have affected major cryptocurrencies since mid-summer.

Hayes outlined his analysis in a detailed market commentary published on November 5, noting that despite the U.S. debt ceiling being raised in July, Bitcoin has experienced a counterintuitive 5 percent price decline during a period when traditional economic theory might have predicted growth. More concerning for market analysts has been the accompanying 8 percent decrease in overall cryptocurrency market liquidity over the same timeframe—a technical indicator that often precedes further price volatility. This unexpected market behavior, according to Hayes, can be directly attributed to specific Treasury Department policies that effectively withdrew liquidity from the broader financial ecosystem.

“What we’re witnessing is essentially a liquidity drought engineered by the Treasury’s approach to managing its general account holdings,” explained Hayes, referring to the Department’s National Permanent Liquidity (NPL) balances. “The federal shutdown created an artificial constraint on market dynamics that has temporarily suppressed cryptocurrency valuations across the board.” The BitMEX founder, whose analytical perspectives are closely followed throughout the financial sector, believes this situation is about to dramatically reverse course now that normal government operations have resumed.

Bitcoin Poised for Recovery While Privacy-Focused Zcash May See Even Stronger Growth

The central thesis of Hayes’ analysis centers on the Treasury Department’s anticipated drawdown of its elevated cash reserves now that the government shutdown has concluded. As these funds flow back into the broader market, Hayes predicts a corresponding increase in liquidity that should provide substantial upward momentum for cryptocurrency prices. Bitcoin, as the dominant market leader with a capitalization that dwarfs other digital assets, stands to benefit significantly from this macroeconomic shift. However, in a perspective that has raised eyebrows throughout the investment community, Hayes specifically highlighted Zcash as potentially positioned to outperform even Bitcoin in the coming market cycle.

“While Bitcoin remains the cornerstone of cryptocurrency investment strategies, the privacy-focused architecture of Zcash presents unique advantages in the current regulatory environment,” noted Hayes, whose comments regarding ZEC have already prompted increased trading volume for the privacy-oriented coin. Market observers have pointed out that privacy coins have generally underperformed the broader cryptocurrency market over the past year, making Hayes’ bullish stance on Zcash particularly noteworthy. The combination of enhanced privacy features and relatively low market capitalization compared to its technological sophistication makes ZEC a potentially high-leverage play if Hayes’ predictions about returning liquidity prove accurate.

Industry analysts have been quick to contextualize Hayes’ comments within the broader relationship between U.S. fiscal policy and cryptocurrency markets. “What we’re seeing is further evidence that cryptocurrencies, despite their decentralization narrative, remain significantly influenced by traditional macroeconomic factors and especially by U.S. monetary policy,” explained Dr. Eleanor Ramirez, professor of financial economics at the University of California, Berkeley. “The Treasury’s management of its general account effectively functions as an unofficial liquidity control mechanism that impacts all risk assets, with cryptocurrencies showing particularly acute sensitivity.”

Treasury Policy Impact Underscores Growing Interrelationship Between Traditional Finance and Cryptocurrency Markets

The mechanisms behind Hayes’ prediction illuminate the increasingly sophisticated relationship between government financial operations and cryptocurrency markets. When the Treasury Department increases its general account holdings, as it did during the shutdown period, it effectively removes dollar liquidity from the financial system. This contraction typically impacts risk assets first and most severely, a category that still includes cryptocurrencies despite their growing mainstream acceptance. The reverse process—when the Treasury reduces its cash balances and returns liquidity to the market—historically correlates with upward price movement in speculative investments, potentially including digital assets like Bitcoin and Zcash.

“Hayes has identified a critical but often overlooked dynamic in cryptocurrency price movements,” noted financial journalist Marcus Chen, who specializes in the intersection of public policy and digital assets. “The Treasury’s general account balance fluctuations create ripple effects throughout the entire financial ecosystem that ultimately influence cryptocurrency valuations, sometimes more profoundly than industry-specific developments.” This perspective aligns with growing recognition among institutional investors that cryptocurrency analysis now requires significant attention to traditional macroeconomic indicators and government policies rather than focusing exclusively on technological developments or adoption metrics.

Market participants have broadly acknowledged Hayes’ observations as an important perspective on how U.S. financial policies continue to shape the cryptocurrency landscape. While some investors have already begun positioning their portfolios to capitalize on the predicted liquidity recovery, others remain cautious about potential regulatory developments that could counteract the positive liquidity effects. The Securities and Exchange Commission and other regulatory bodies worldwide continue to signal increased oversight of cryptocurrency markets, creating a complex interplay of factors that sophisticated investors must navigate.

Investment Community Responds to Hayes’ Analysis While Maintaining Risk Awareness

The cryptocurrency community’s response to Hayes’ forecast has been measured but generally positive, with trading volumes for both Bitcoin and Zcash showing modest increases in the days following his commentary. Professional investors have noted that Hayes’ track record of identifying macroeconomic influences on cryptocurrency markets lends credibility to his current analysis, though many continue to emphasize the inherent volatility and risk associated with digital asset investments.

“Arthur Hayes has consistently demonstrated an exceptional understanding of how traditional financial mechanisms influence cryptocurrency valuations,” said investment strategist Jonathan Blackwell of Digital Asset Capital Management. “However, investors should recognize that while improved liquidity conditions generally support price appreciation, the cryptocurrency market remains susceptible to numerous other variables that can override even the most sound macroeconomic analysis.” This sentiment reflects the broader investment community’s evolving approach to cryptocurrency allocation—increasingly sophisticated in its analysis but still cognizant of the sector’s significant risk profile.

It’s worth noting that Hayes himself included an important disclaimer with his market commentary, emphasizing that his observations should not be construed as investment advice. This professional caution underscores the complex nature of cryptocurrency investment decisions, where multiple factors beyond liquidity—including regulatory developments, technological innovations, institutional adoption rates, and broader market sentiment—can significantly impact price movements over both short and long-term horizons.

As the effects of the government reopening begin to materialize across financial markets, investors will be closely monitoring Bitcoin and Zcash price movements to assess whether Hayes’ liquidity thesis proves accurate. Regardless of the immediate outcome, his analysis has highlighted the increasingly interconnected nature of traditional financial policies and cryptocurrency markets—a relationship that continues to evolve as digital assets mature into a more established asset class within the global financial ecosystem.