BitMEX co-founder Arthur Hayes said Bitcoin could break new records next year if financial conditions ease in the United States. He pointed to several factors that could trigger a significant increase in dollar liquidity in 2026, and linked recent market movements to capital flows in 2025.
Hayes links Bitcoin and dollar liquidity
Hayes said the key to Bitcoin is the amount of money flowing through the system. He cited the Federal Reserve’s balance sheet growing through what he called more aggressive money creation, mortgage rates falling as lenders ease, and commercial banks stepping up lending to industry, supported by government strategy.
Bitcoin fell 15% in 2025, while gold rose 44%. Technology stocks led the S&P 500 with a total return of 25%, compared to an S&P total return of 18%. Hayes argued that these numbers were not about cryptocurrencies losing fundamental ground last year, but rather about where liquidity would land.
Improved technical capabilities with government support
Hayes also highlighted how the government has been moving capital into specific technology projects. He suggested that both China and the United States are using administrative measures and public funds to push money into artificial intelligence-related businesses, which he said is helping tech companies attract large flows of capital regardless of their immediate return on equity.
He cited U.S. President Donald Trump’s name when pointing to policy moves to encourage AI investment. This dynamic, he said, helped explain why the Nasdaq performed well even as Bitcoin slumped.
Bitcoin (red), Gold (gold), Nasdaq 100 (green), and Dollar Liquidity (magenta). Source: Arthur Hayes.
Policy and military spending issues
He added an even sharper point about military spending. Hayes said the United States would continue to use military force, and said such efforts would require large-scale production financed through the banking system.
In his view, broad liquidity could expand further if the banking sector starts financing large government-backed projects. Reports have revealed that Hayes believes these forces could increase dollar liquidity in 2026, creating fertile ground for risk assets including Bitcoin.
Cryptocurrencies rise this week on inflation data
Markets reacted to the latest US inflation data being weaker than expected. Bitcoin rose to nearly $97,000, up more than 5% in 24 hours. Ethereum, Solana, and Cardano each rose nearly 8% over the same span.
Cash was looking for new homes as bond yields fell and the dollar weakened. This pattern is well known: When inflation slows, borrowing costs fall and investors are more likely to take on risk.
conditional bull case
Based on Hayes logic, Bitcoin’s rise depends on the ongoing fiat currency decline. He frames Bitcoin as a financial technology that increases in value as fiat currencies weaken. This view is consistent, but conditional. The Hayes scenario may not play out if central banks choose to remain tight, or if inflation flares up again and forces a change in policy. For now, his predictions are a matter of liquidity and will be tested by policy choices in 2026.
Featured image from Unsplash, chart from TradingView
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