Key Highlights
- Arthur Hayes links US liquidity returning to crypto rally.
- According to Hayes, when the US government reopens, spending from TGA could increase liquidity.
- Hayes expects Bitcoin and Zcash to rally because of increased liquidity.
BitMEX co-founder Arthur Hayes predicts that a resurgence in US market liquidity following the government’s restart could trigger the next leg up for Bitcoin (BTC) and Zcash (ZEC). The prominent crypto investor shared his analysis today, November 5, 2025 on social media platform X (formerly known as Twitter). In his tweet, he is also highlighting a direct connection between Federal fiscal activity, Treasury General Account (TGA) movements, and crypto market performance.
$BTC (yellow) -5%, $ liq (white) -8% since US debt ceiling raised in July. TGA build up sucked $ out of the system. When US gov shutdown ends, TGA will fall +ve for $ liq, and $BTC will rise … and $ZEC will go up MOAR! pic.twitter.com/A9tflGuBHH
— Arthur Hayes (@CryptoHayes) November 5, 2025
Hayes pointed out that since the US debt ceiling was raised in the month of July 2025, Bitcoin’s price has dropped approximately by 5%, coinciding with an estimated decline of 8% in broad liquidity conditions. According to the X post by Hayes, this decline stems from the US Treasury Department’s accumulation of cash in its TGA (a process that drains liquidity from financial markets).
Liquidity and Market Impact
The TGA acts as the US Government’s main operational account at the Federal Reserve. When the Treasury issues bonds and it holds the proceeds in this account, dollars are temporarily removed from the banking system, tightening liquidity conditions. On the contrary, when the government spends from the TGA, those funds are distributed back into the economy, boosting liquidity and risk asset prices.
According to the BitMEX co-founder, the timing of this liquidity reversal will coincide with the end of the ongoing US government shutdown, which began following partisan budget disputes in October. Once Federal spending resumes, he expects a significant reduction in the TGA balance, freeing up liquidity that could flow into both equities and crypto assets.
Hayes also noted that every time the TGA balance declines, you see an uptick in risk sentiment. He further pointed out prior liquidity cycles that fuelled rallies across Bitcoin and alternative assets. This is likely to repeat once the US government reopens and fiscal flows normalize.
What Hayes posted today on X also resonates with many other crypto analysts as well. Recent market data shows that when there is less money flowing into the system (which has been the scenario since the last few months), some investors even pull money out of Bitcoin ETFs.
Even though big institutions have started getting involved again, broader economic challenges, like uncertain government spending, high interest rates, and the Federal Reserve reducing support are holding the prices back.
The cryptocurrency market is down by 2.9% in the last 24-hours. As of now, the market capitalization stands at $3.38 trillion. Bitcoin is currently trading around the $101,000 mark and Hayes believes that once more liquidity enters the market, it will spark a recovery in the cryptocurrency market as well.
Hayes also highlighted that Bitcoin’s long-term price movement depends more on the amount of money present in the global financial system than on crypto-specific factors.
Zcash Poised for Larger Upside
Hayes in his post on X has also pointed out that Zcash (ZEC) as a coin could also perform better than others when liquidity returns to the market. He did not explain his reasoning in detail, but many believe it’s because privacy coins like Zcash are getting more attention as governments discuss stronger financial tracking and surveillance.
Zcash uses zero-knowledge proofs, which allow people to send transactions privately. In the past, ZEC has often moved up during periods when the market is driven by speculation and fresh liquidity. Hayes is also suggesting that as the money flows back into Bitcoin during a market recovery, privacy coins could rise with it.
Market data also hints at possible upside for ZEC. The token is trading near multi-month lows at around $430, much lower than its 2021 high. If liquidity improves because of more government spending and inflation, as Hayes expects, coins like Zcash could see outsized gains.
Recently Arthur Hayes also predicted that Zcash price could surge to $10K, and this endorsement caused a significant rally in the price of the Zcash token. Similarly, after this announcement, the price of the token has increased by 0.5% in the past hour.
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