BitMEX co-founder Arthur Hayes said Bitcoin could set a new record if US currency conditions ease next year. He pointed out several possible causes for a significant increase in dollar liquidity in 2026, while also linking recent market movements to where capital will flow in 2025.
Hayes Links Bitcoin to Dollar Liquidity
According to Hayes, the key to Bitcoin is the amount of money sloshing through the system. He noted that the U.S. Federal Reserve’s balance sheet is expanding through more aggressive money creation, falling mortgage rates as lenders ease, and commercial banks increasing lending to industry in line with the government’s strategy.
In 2025, Bitcoin fell 15% while gold rose 44%. Technology stocks led the S&P 500 with a total return of 25% compared to the S&P overall return of 18%. Hayes argued that these numbers show that the past year is not a story about cryptocurrencies losing their base case, but rather about where liquidity has gotten to.
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Hayes also highlighted how the government has diverted capital into specific technology projects. He suggested that both China and the United States have used executive actions and public funds to fund artificial intelligence work, which he said has helped tech companies attract large flows regardless of their immediate return on equity.
He singled out US President Donald Trump, pointing to policy moves favoring AI investments. He said this dynamic helped explain why the Nasdaq was strong even as Bitcoin plummeted.
Bitcoin (red), Gold (gold), Nasdaq 100 (green), and Dollar Liquidity (magenta). Source: Arthur Hayes.
Policy and military spending issues
He added a more pointed argument about military spending. Hayes said the United States would continue to use military force and that such efforts would require large-scale production financed through the banking system.
He believes liquidity could expand further if the banking sector starts financing large government-backed projects. According to the report, Hayes believes these forces could boost dollar liquidity in 2026, creating fertile ground for risk assets, including Bitcoin.
Inflation data pushed cryptocurrencies higher this week.
Markets reacted when recent US inflation figures came in at lower-than-expected levels. Bitcoin is close to $97,000, up more than 5% in 24 hours. Ethereum, Solana, and Cardano each recorded gains of around 8% over the same period.
As bond yields fall and the dollar weakens, cash is looking for new homes. The pattern is familiar. Lower inflation tends to lower borrowing costs and increase investors’ willingness to take risk.
bull case with conditions
According to Hayes’ logic, Bitcoin’s upside potential hinges on continued declines in fiat value. He defines Bitcoin as a monetary technology whose value increases as fiat currency weakens. The view is consistent but conditional. Hayes’s scenario may not unfold if central banks choose to maintain austerity, or if inflation surges and forces a policy change. For the time being, his prediction is a liquidity story. This will be tested by policy choices in 2026.
Featured image from Unsplash, chart from TradingView
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