Arthur Hayes, the co-founder of BitMEX, in his latest blog post, highlighted that Bitcoin 
$77,420’s drop below $90,000 is primarily due to a contraction in dollar liquidity rather than fundamental issues. Hayes mentioned that the dwindling effects of ETF arbitrage and digital asset treasuries (DAT) have intensified selling pressure, suggesting that Bitcoin could temporarily fall to the $80,000–$85,000 range. However, he predicts that an increase in money supply following a potential correction in U.S. stock markets could drive Bitcoin to the $200,000–$250,000 range by the year’s end.
“Liquidity Declining, Bitcoin Under Pressure”
According to Hayes, Bitcoin serves as an indicator of the global fiat currency supply in free markets. With diminishing dollar liquidity in the U.S., institutional fund flows into ETFs and DAT shares have nearly halted. From April to October, capital directed at Bitcoin ETFs decreased rapidly as the appeal of basis differentials in futures trading faded. Hayes emphasized that institutional buyers were purchasing Bitcoin not out of belief in the asset, but for returns higher than interest rates, underscoring the end of this equilibrium.
The capital exiting Bitcoin ETFs is also dampening sentiment among individual investors. The discounting of DAT structures, such as Strategy’s (MSTR) market value dropping below its net asset value, further limits institutional demand. Hayes asserts that the cessation of fund flows into ETFs and DATs has removed the last factors obscuring the negative dollar liquidity picture.
Post-Pressure “Money Printing” Wave
While Hayes anticipates a short-term downturn, he argues that it will not transform into a sustained bear trend. He believes U.S. Treasury Secretary Buffalo Bill Bessent will have no option but to ease markets despite the Federal Reserve. A 10–20% correction in stocks and bond yields approaching 5% could prompt policymakers to revert to money printing.
The noted investor also mentioned that China is preparing for its monetary easing maneuver. The resumption of government bond purchases by the People’s Bank of China indicates, in his view, a renewed momentum in the global liquidity cycle. He concluded his blog post by stating, “Both Trump and Xi clearly acknowledge Bitcoin’s value. With such clarity, how can one be pessimistic in the long run?”
