Arthur Hayes Sees Bitcoin Hitting $500,000 in 2026 on Dollar Liquidity Surge
BitMEX co-founder Arthur Hayes is sticking with his rosy view of Bitcoin - and he thinks 2026 could be a real turning point...
Quick overview
- Arthur Hayes maintains a positive outlook on Bitcoin, predicting a significant rebound in 2026 as US dollar liquidity improves.
- He attributes Bitcoin's underwhelming performance in 2025 to tighter financial conditions rather than fundamental flaws.
- Hayes believes that increased government spending and monetary policy will drive Bitcoin's value, with a target price of $500,000 by the end of 2026.
- He views Bitcoin as a protective asset against excessive money printing, suggesting that its value is tied to the dynamics of fiat currency.
BitMEX co-founder Arthur Hayes is sticking with his rosy view of Bitcoin – and he thinks 2026 could be a real turning point when US dollar liquidity bounces back. In his latest essay, Frowny Cloud, Hayes points out that Bitcoin’s fairly lack-lustre performance in 2025 was more about tighter financial conditions and not some kind of deeper flaw in the Bitcoin fundamentals. As things change in the world of liquidity, he reckons Bitcoin is set to make a comeback and reach new highs.
Hayes is spot on with his long-held theory that Bitcoin acts as some kind of protection against the government printing too much money – and has previously said a $500,000 price target by the end of 2026 is a safe bet, driven by monetary policy rather than some wild-eyed speculation. In his worldview, times when the government is printing more money tend to favour hard-to-get assets like Bitcoin as people lose faith in the value of the fiat money they hold.
Dollar Liquidity – It’s All About the Main Event
At the heart of Hayes’ argument is his hunch that US dollar liquidity is going to start growing over the next couple of years. He has a few channels in mind where this extra cash could start flowing back into the financial markets:
- The Fed deciding to expand its balance sheet again (think more stimulus packages)
- Mortgage rates going down making it a bit easier for people to borrow
- More bank lending to businesses which have the government backing them
- The government splashing out on some big industrial and defence initiatives
Arthur Hayes predicts $BTC could reach new all-time highs in 2026 if US dollar liquidity expands via Fed balance sheet growth, lower mortgage rates, bank lending, and defense spending. Cites tight 2025 liquidity for BTC's ~14% drop vs gold's 44% gain. #Bitcoin
— Vincent Bu Lu (@VincentBuLu1) January 15, 2026
Hayes says big government spending, especially when it involves banks, ends up putting more money in circulation, historically helping out assets like Bitcoin as people look for things that won’t get hit by the increase in money supply.
What the Price Action in 2025 Tells Us
Bitcoin’s price movements in 2025 are worth a closer look. We got a record high near $126,000 but then the price plummeted in that big market selloff in October, briefly getting all the way down to $85,000. Volatility did settle down a bit after that but even so, Bitcoin struggled to get back up to $100,000 and is now hovering around $96,000.
Hayes puts the blame for this dip on a lack of liquidity rather than any lack of interest – and he notes that government intervention shifted money away from places like Bitcoin and into places like artificial intelligence. In 2025, the tech sector was the real star of the S&P 500 with gains of 24.6% where the overall index only managed 18%.
From Hayes’ point of view, Bitcoin is basically a form of “monetary technology” with its long term value tied to the way that the fiat currencies work. While the short term price movements might be about what’s hot or what’s not with government policy, he still thinks that the increasing cash supply in the system underpins Bitcoin’s value – and makes him think 2026 will be the year things really start to take off.
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