BitMEX co-founder Arthur Hayes said Bitcoin could reach new record highs if US monetary conditions ease next year. He highlighted several possible triggers for a sharp increase in dollar liquidity in 2026, while linking recent market movements to the direction of capital flows in 2025.
Hayes Links Bitcoin to Dollar Liquidity
According to Hayes, the key to Bitcoin is the amount of money flowing through the system. He cited the expansion of the U.S. Federal Reserve’s balance sheet through what he called more aggressive money creation, lower mortgage rates as lenders loosen and commercial banks increasing lending to industries supported by the government strategy.
Bitcoin fell 15% in 2025 while gold jumped 44%. Technology stocks led the S&P 500 with a total return of 25%, compared to an overall return of 18% for the S&P. According to Hayes, these figures show that the last year has been a story of where liquidity is going, not where cryptocurrency is losing.
Government support advances technology
Hayes also highlighted how governments have shifted capital to certain technology projects. He suggested that China and the United States have used executive actions and public funds to invest in artificial intelligence work, saying this has helped tech companies attract significant inflows, regardless of immediate return on equity.
He named US President Donald Trump as he highlighted policy measures promoting investment in AI. That 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.
Politics and military spending matter
He added a more specific statement regarding military spending. Hayes said the United States would continue to use its military power and such efforts would require large-scale production financed by the banking system.
He said it could increase liquidity if the banking sector started financing large government-backed projects. Reports have revealed that Hayes believes these forces could cause dollar liquidity to increase in 2026, creating fertile ground for risky assets, including Bitcoin.
Inflation data pushed crypto higher this week
Markets reacted when the latest US inflation figures turned out to be colder than expected. Bitcoin neared $97,000 and rose more than 5% in 24 hours. Ethereum, Solana, and Cardano each saw gains of nearly 8% during the same period.
Bond yields fell and the dollar weakened, leaving cash seeking a new refuge. This pattern is familiar: Lower inflation tends to lower borrowing costs and makes investors more willing to take risks.
A bull deal with conditions
According to Hayes’ logic, Bitcoin’s rise depends on the continued debasement of fiat currencies. It presents Bitcoin as a monetary technology whose value increases when fiat currency is weakened. This vision is coherent but conditional. If central banks choose to stay tight, or if inflation soars and forces a policy change, Hayes’ scenario may not come true. For now, his forecast is a liquidity story – one that will be tested by policy choices in 2026.
Featured image from Unsplash, chart from TradingView
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