Hayes Projects $15.3T Treasury Debt at Korea Blockchain Week

Seoul, South Korea - Arthur Hayes, Chief Investment Officer at cryptocurrency investment firm Maelstrom, delivered a technical analysis of the Federal Reserve's governance structures and potential policy scenarios during a presentation at Korea Blockchain Week.

Hayes described the composition of the Federal Reserve's decision-making bodies, explaining that the Board of Governors consists of seven members appointed by the President, who require Senate confirmation.

He identified three current board members — Michelle Bowman, Christopher Waller, and Stephen I. Miran — as having positions aligned with those of the Trump administration. 

He noted that Miran's confirmation passed by a single vote.

The presentation detailed the mechanics of Federal Reserve operations, including how the Board of Governors controls interest rates on excess reserves and influences discount window lending rates.

Hayes noted that all board governors serve as permanent voting members of the 12-member Federal Open Market Committee, which manages the central bank's balance sheet operations.

Hayes presented calculations estimating $15.3 trillion in Treasury debt issuance requirements through 2028.

This figure combines maturing debt rollovers with projected federal deficits of approximately $2 trillion, as estimated by the Congressional Budget Office.

He projected that Federal Reserve purchases could account for 40 to 45 percent of new issuance, mirroring pandemic-era purchasing patterns, and resulting in $7.5 trillion in balance sheet expansion.

The analysis included projections for banking system credit creation totaling $7.5 trillion, derived from Federal Reserve deposit and liability statistics during the COVID-19 period.

Hayes used this data in a mathematical model that estimated a potential Bitcoin price target of $3.4 million by 2028.

Hayes stated he was "pretty much 100 percent confident" that the specific price projection would not occur, characterizing the calculation as a directional analysis rather than a forecast.

The presentation referenced historical yield curve control policies from the 1940s, when Treasury bill rates were capped at 0.375 percent and long-term bonds at 2.5 percent.

Hayes compared these historical rates to current yields of approximately 4 percent on short-term instruments and 4.15 percent on 10-year bonds.

Hayes described possible coordination between Treasury debt issuance and Federal Reserve purchasing policies to support what he termed re-industrialization objectives.

He observed that regional banks require steeper yield curves to extend credit to small and medium enterprises profitably.

Maelstrom operates as a family office focused on cryptocurrency investments. Hayes previously held trading positions at Deutsche Bank and Citibank before co-founding cryptocurrency exchange BitMEX.

The Korea Blockchain Week conference is taking place in Seoul this week.