Hayes Predicts Bitcoin and JPMorgan Surge Fueled by Bank-Issued Stablecoins

In a detailed July 3 blog post, Arthur Hayes outlined how US Treasury Secretary Scott Bessent's liquidity strategy—executed through financial innovation rather than traditional money printing—could propel Bitcoin and JPMorgan to new heights. Hayes described this covert liquidity injection approach as having two major beneficiaries: Bitcoin, which thrives in low-yield, high-liquidity environments, and JPMorgan through its JPMorgan Digital (JPMD) stablecoin. The banking giant's stablecoin adoption could digitize deposits, reduce compliance costs, and generate risk-free yields by purchasing US Treasury bills—potentially unlocking $6.8 trillion in T-bill purchasing power through what Hayes termed a "Quid Pro Stablecoin" system. Regulatory developments like the proposed GENIUS Act might grant systemically important banks a stablecoin monopoly, sidelining fintech firms like Circle. Hayes emphasized that converting even a portion of JPMorgan's deposits into stablecoins could generate hundreds of billions in low-risk revenue, potentially doubling its market capitalization. Notably, the JPMD stablecoin will operate on Coinbase's Ethereum-based Layer-2 network Base, cementing Ethereum's role as the settlement layer for this new banking liquidity mechanism. Analysts suggest Ethereum could also benefit from corporate treasury demand due to its staking yields—a feature Bitcoin lacks. While not explicitly addressed by Hayes, the infrastructure supporting these developments positions Ethereum for significant upside.