Arthur Hayes Predicts Bitcoin Surge Despite Market Volatility
Arthur Hayes' Bitcoin Forecast Amid Market Fluctuations
Arthur Hayes remains confident that Bitcoin could reach $200,000–$250,000 by the end of 2025, undeterred by the October–November market crash and prevailing uncertainty.
In a recent appearance on the Milk Road Show on November 26, Hayes identified the drop to $80,000 as the cycle's bottom, noting a shift in global dollar liquidity.
“I’m going to stick with it,” Hayes declared when questioned about his $200,000–$250,000 target for the year-end. “If I’m wrong, it doesn’t matter… I’m long, I’m still happy either way.”
Market Dynamics: $80,000 Identified as the Bottom
Hayes explained the movement from Bitcoin’s $125,000 peak to $80,000 as a liquidity-driven reset, rather than the onset of a new bear market.
His analysis, based on a Bloomberg US dollar liquidity index, showed a withdrawal of approximately $1 trillion from dollar money markets since July, influenced by US Treasury actions and the Federal Reserve's quantitative tightening.
Hayes emphasized that Bitcoin remained stable despite liquidity drains due to ETF inflows and Digital Asset Treasury (DAT) issuances.
As those flows reversed, Bitcoin “fell to where it should have been based on the dollar liquidity situation.”
ETF Trades and Market Misinterpretations
Hayes argued that the celebrated ETF bid was misunderstood by retail traders. Major holders of BlackRock’s IBIT ETF, such as Brevan Howard, Goldman Sachs, Millennium, Jane Street, and Avenue, were exploiting a basis trade rather than investing in Bitcoin long-term.
“They’re taking the IBIT ETF, buying it, pledging it with their broker, then selling a futures contract, earning 7 to 10% per annum,” Hayes explained.
With falling funding rates in September and October, these traders unwound their positions by selling ETFs and buying back futures, leading to negative ETF flows.
Retail investors misconstrued these outflows as institutions dumping Bitcoin, Hayes noted, without realizing institutions were merely unwinding a funding strategy.
Future Liquidity and Bitcoin's Stagnation Around $90,000
Hayes attributes Bitcoin's current $90,000 range to uncertainty about the US administration's credit creation strategies.
Markets remain skeptical about the timeline and scale of an additional “$10 trillion” in liquidity.
“Once we see concrete actions, markets will reassess the dollar liquidity situation, and Bitcoin will rise accordingly,” Hayes stated.