Arthur Hayes, co-founder of BitMEX, predicts that Bitcoin is likely to reach new all-time highs, despite its underperformance against gold and tech stocks in the previous year. He identifies potential expansion of monetary conditions as the primary catalyst for this anticipated surge.
Dollar Liquidity as a Key Driver
Hayes emphasized that an expansion in dollar liquidity is essential for Bitcoin to regain its momentum. He anticipates this expansion will occur in 2026, citing several factors that could lead to a significant increase in dollar liquidity.
Catalysts for Monetary Expansion
The catalysts identified by Hayes include the expansion of the U.S. Federal Reserve's balance sheet through money printing, a decline in mortgage rates as liquidity continues to loosen, and an increased willingness from commercial banks to lend to U.S. government-backed strategic industries. Hayes stated, "The U.S. will continue to flex its military muscle, and to do so requires the production of weapons of mass destruction financed by the commercial banking system."
Bitcoin's Relationship with Monetary Policy
Monetary expansion is generally considered bullish for Bitcoin, as investors tend to gravitate towards riskier assets like cryptocurrencies in anticipation of a devaluation of the U.S. dollar due to inflation. Hayes noted that while dollar liquidity decreased in 2025, leading to a corresponding fall in Bitcoin's value, the Nasdaq did not experience a similar downturn. This divergence was attributed to the nationalization of artificial intelligence by both China and America.
Impact of Government Intervention on Tech Stocks
Hayes explained that through executive orders and government investment, the administration is influencing free market signals, causing capital to flow into all aspects of AI, regardless of the real return on equity. Technology stocks emerged as the top-performing sector in the S&P 500 in 2025, delivering a total return of 24.6%, which surpassed the S&P 500 Index's overall return of 18% by 6.6%.
Bitcoin as Monetary Technology
Hayes characterized Bitcoin as a monetary technology whose value is intrinsically linked to the extent of fiat debasement. He asserted that this relationship alone guarantees Bitcoin's value is greater than zero, but for Bitcoin to approach a valuation of $100,000, continuous fiat monetary debasement is a prerequisite.
Analysis of 2025 Performance
In 2025, Bitcoin experienced a decline of 14.40%, while gold saw a significant surge of 44.40% over the same period. The prevailing liquidity conditions did not favor crypto portfolios. However, Hayes cautioned against drawing incorrect conclusions from Bitcoin's underperformance in 2025, stating, "It was as it always is, a liquidity story."