BitMEX co-founder and crypto-essayist Arthur Hayes published a lengthy blog post on Thursday breaking down the Federal Reserve’s new program to protect the banking system – and what it means for Bitcoin. 

The initiative titled the “Bank Term Funding Program” is regarded by Hayes as a “repackaged” form of Yield Curve Control (YCC) that will trigger another bull market for Bitcoin. 

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Hayes began by reviewing the macroeconomic backdrop since 2020, from the period of heavy covid related stimulus to the subsequent tightening of interest rates throughout 2022. The ensuing crunch in financial assets crushed bankers’ bond portfolios, and a higher fed funds rate incentivized a rapid withdrawal of deposits from small banks toward higher-yielding money market funds. 

This forced those smaller banks to sell the US treasury debt and mortgage-backed securities on their balance sheets at a realized loss – something that forced a bank run against Silicon Valley Bank earlier this month. 

To stem contagion surrounding SVB’s collapse, the Federal Reserve bailed out all of the bank’s depositors, and also announced its Bank Term Funding Program (BTFD) to provide liquidity to U.S. banks. 

The program lets any federally insured depository institution use government debt and mortgage-backed securities as collateral to borrow money without limit – with collateral valuation at par value, rather than current market value.

According to Hayes, this implicitly allows $4.4 trillion to be printed into the US economy – even more than COVID stimulus, which was worth $4.189 trillion. “During the COVID money printing episode, Bitcoin rallied from $3k to $69k,” he noted.  

Hayes also predicted that the US dollar is likely to str