Hayes expects Bitcoin's price to reach over $110,000 due to liquidity shifts.
The monetary tightening in 2025 has restrained Bitcoin's price performance.
The growth of the Federal Reserve's balance sheet and mortgage-backed securities purchases are key driving factors.
Leveraged bets on MSTR and Metaplanet stocks are among Hayes's most important strategies.
Arthur Hayes, co-founder of BitMEX, shared a new vision for the future $BTC in an article titled 'Frowny Cloud.' In the article, Hayes explains the reasons behind Bitcoin's stumble during 2025, and why he believes that 2026 could be much better.
His core idea is simple: Bitcoin's weak performance last year was a result of a shortage of US dollar liquidity. Now, this situation is expected to change. If the Federal Reserve reopens the liquidity tap, Arthur Hayes believes that Bitcoin could reach much higher levels.
Why Bitcoin stumbled in 2025
According to Hayes, the weak performance of $BTC in 2025 was not related to cryptocurrencies themselves. Rather, it was linked to liquidity flows. The US Federal Reserve spent most of 2025 pulling money out of the system through quantitative tightening (QT). This means shrinking the balance sheet and making credit harder to obtain. When dollars become scarce, high-risk assets come under pressure.
This is exactly what happened with Bitcoin. At the time gold surged, supported by intense purchases from governments and central banks, and US tech stocks rose amid an AI frenzy, Bitcoin moved in a sideways or downward range. It ended 2025 within a range between $87,000 and $95,000, which is much lower than many investors had hoped. Arthur Hayes emphasizes that this does not mean Bitcoin is broken, but rather highlights its sensitivity to changes in dollar liquidity.
Why 2026 might be different
Looking to the future, Arthur Hayes expects a reversal in the macroeconomic picture. He sees that dollar-denominated credit will expand again in 2026 through three main pathways. First, the Federal Reserve may resume growing its balance sheet, adding at least $40 billion per month to the system. Secondly, banks may increase lending as financial conditions improve.
Third, the Federal Reserve may resume purchasing mortgage-backed securities, possibly by about $200 billion. This could contribute to lowering mortgage rates and stimulating the economy. Typically, an increase in liquidity means higher demand for high-risk assets. Arthur Hayes believes this environment will be supportive of Bitcoin and other cryptocurrency assets. If this wave of liquidity arrives, he expects Bitcoin to exceed $110,000, and possibly even higher if momentum accelerates.
Hayes' favorite bets on Bitcoin
Hayes' optimism is not limited to Bitcoin itself. He also favors stocks that act as leveraged bets on Bitcoin. His preferred options include MicroStrategy (MSTR) and the Japanese company Metaplanet (3350). Both companies hold large reserves of Bitcoin, and their stocks often move faster than Bitcoin during bull runs. When Bitcoin rises, these stocks tend to record larger gains. Arthur Hayes says this is his favorite way to bet on a bullish breakout for Bitcoin in early 2026.
What does this mean for investors?
Arthur Hayes' message is clear. $BTC Follow the liquidity. When dollars are scarce, Bitcoin stumbles. When liquidity flows, it surges. He believes that 2025 was the year of the frowny cloud. However, 2026 could be the year of the sun's return. Nevertheless, everything remains contingent on what the Federal Reserve and banks will actually do. Currently, the Bitcoin news report concludes that all eyes are on US monetary policy, as it could determine the next big move for the currency.
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