Lede
Arthur Hayes, the co-founder of BitMEX, has projected that Bitcoin will likely reach new all-time highs in the near future. This forecast comes despite the asset’s recent period of poor performance when compared against traditional safe havens like gold and high-growth technology stocks during the previous year. Hayes identifies the potential expansion of global monetary conditions as the primary driver for this anticipated recovery, suggesting that the digital currency’s trajectory is deeply intertwined with the availability of dollar liquidity in the global financial system.
According to the co-founder, the catalyst for a significant price movement will be a shift in monetary policy. He believes that for Bitcoin to regain its momentum, dollar liquidity must undergo a period of expansion, a scenario he expects to unfold by 2026. While the asset has faced headwinds recently, Hayes remains confident that the underlying economic conditions are shifting in a way that will favor risk-on assets. Current market data shows that Bitcoin has already begun to show signs of short-term strength, posting a 12.20% increase over the past 30 days, which may signal the beginning of a shift in investor sentiment as the market looks toward future liquidity cycles and a potential move toward new valuation peaks.
Context
The broader economic context for these predictions is rooted in the divergent performance of various asset classes throughout 2025. During that year, Bitcoin experienced a notable decline of 14.40%, a sharp contrast to the significant gains seen in other sectors. Technology stocks, in particular, emerged as the top-performing segment of the S&P 500 in 2025, delivering a total return of 24.6%. This outperformance by the tech sector occurred even as Bitcoin struggled to maintain its value, highlighting a period where traditional equities decoupled from the leading cryptocurrency.
Furthermore, gold demonstrated exceptional strength in 2025, soaring by 44.40% over the course of the year. This movement indicated a strong investor preference for traditional hedges during a period where dollar liquidity actually declined. Hayes notes that the decline in liquidity during 2025 was a primary factor in Bitcoin’s downward movement. He characterizes Bitcoin as “monetary technology,” asserting that its value is fundamentally linked to the degree of fiat debasement. From this perspective, the underperformance of 2025 was not a failure of the technology itself but rather a reflection of the prevailing liquidity environment which favored gold and specific equity sectors over digital assets. Hayes argues that the 2025 performance was essentially a “liquidity story,” and that the asset’s value is greater than zero specifically because of its role as monetary technology.
Impact
The impact of the predicted expansion in dollar liquidity is expected to be overwhelmingly positive for the cryptocurrency market. Monetary expansion is generally viewed as a bullish signal for Bitcoin, as it tends to drive investors toward riskier asset classes in anticipation of the US dollar losing its purchasing power due to inflation. When the supply of dollars increases, assets with fixed or limited supplies, such as Bitcoin, often see increased demand as a hedge against the devaluation of fiat currency. This relationship underscores the importance of the Federal Reserve’s future actions and the broader health of the financial system.
Hayes anticipates that the coming years will see an increase in liquidity, which he believes is necessary for Bitcoin to reach higher price targets. If these conditions materialize in 2026 as Hayes expects, the resulting flood of capital could provide the necessary support for Bitcoin to surpass its previous valuation milestones. This shift would represent a reversal of the 2025 trend where restricted liquidity constrained the growth of the crypto market. The anticipated transition toward a more expansionary monetary environment suggests a potential realignment of Bitcoin’s price with the broader trends of fiat currency debasement and global credit expansion. Ultimately, the co-founder asserts that the asset is only valuable in relation to the amount of fiat debasement occurring, guaranteeing its continued relevance in an inflationary environment.
Outlook
Looking ahead to 2026, the outlook for Bitcoin remains centered on the return of favorable liquidity conditions. Hayes has explicitly stated his belief that dollar liquidity will expand during this timeframe, creating a foundation for the next major growth cycle in digital assets. This outlook assumes that the contractionary pressures observed in 2025, which led to a 14.40% decline in Bitcoin’s price, will give way to a new phase of monetary loosening. As the broader monetary base expands, the resulting capital flow is expected to find its way into the cryptocurrency ecosystem.
The long-term value proposition of Bitcoin remains its role as a hedge against the ongoing debasement of fiat currencies. While the asset may face temporary periods of underperformance compared to gold or tech stocks, the overarching trend of monetary expansion is seen as an inevitability that will eventually push prices to new all-time highs. The current 30-day gain of 12.20% provides a snapshot of the asset’s potential for recovery when market conditions begin to shift. For observers of the market, the key indicators will be whether dollar liquidity follows the expansionary path predicted for 2026, as Hayes suggests that continuous fiat monetary debasement is the requirement for Bitcoin to reach significant new price milestones in the years to come.
About the Author
