Bitcoin’s lousy 2025 was actually a win in Arthur Hayes’s book — and the price is about to pump.
The BitMEX co-founder and crypto angel investor published a new essay on January 14, arguing that the top cryptocurrency did exactly what it should have done last year: track dollar liquidity lower.
“Bitcoin performed as to be expected, like utter dog shit,” Hayes wrote. ”Let’s not draw the wrong conclusions from Bitcoin’s 2025 underperformance. It was as it always is, a liquidity story.”
Things are about to change, however.
Now Hayes sees liquidity returning through three channels: the Federal Reserve’s new Reserve Management Purchases programme that will bring money printing; commercial banks that will start lending to strategic industries; and mortgage rates will fall.
Bitcoin’s bad 2025
Many Bitcoin investors were expecting the top crypto to jump aboard a never-ending flight to the moon in 2025. That didn’t happen — despite all the elements for such a scenario already present.
Bitcoin exchange-trade funds accumulated coins like they were going out of fashion. Donald Trump won the presidential election, promising to make the US the crypto capital of the world, and institutional adoption accelerated.
Yet Bitcoin finished the year as one of the worst-performing major assets, lagging both gold and tech stocks.
Hayes argues most investors are drawing the wrong conclusion from this. They assume the digital gold thesis is broken, but Hayes says the opposite.
Bitcoin proved it works exactly as advertised — as a pure liquidity gauge uncorrupted by geopolitical flight-to-safety like gold, or government industrial policy like artificial-intelligence stocks.
That validation sets up 2026.
Liquidity comes back
Hayes identifies three mechanisms driving dollar liquidity higher in 2026.
First, the Fed’s balance sheet bottomed in December when quantitative tightening ended. But now, with the agency’s new RMP, set up in December, adds at least $40 billion monthly.
Second, commercial banks are lending again. JPMorgan launched a $1.5 trillion loan facility for government-backed businesses.
“When a bank issues a loan, it creates a deposit, which creates money ex nihilo,” Hayes wrote.
Third, Trump is pumping housing. Fannie Mae and Freddie Mac will deploy $200 billion to buy mortgage-backed securities, dropping mortgage rates. Americans can then borrow against home equity, creating a wealth effect before November elections.
Even without these factors, Hayes has already predicted that Bitcoin will topple $200,000 by March.
Onward and upward
Hayes is so bullish that he’s adding leveraged Bitcoin exposure through Strategy and Metaplanet positions.
Both trade near two-year lows relative to Bitcoin.
“If Bitcoin can retake $110,000, investors will get the itch to go long Bitcoin through these vehicles,” Hayes wrote. “Given the leverage embedded in the capital structure of these businesses, they will outperform Bitcoin on the upside.”
His thesis isn’t very complicated. Bitcoin bottomed with dollar liquidity. Now that liquidity is expanding, Bitcoin will follow suit.
“Onward and upward, degens,” Hayes concluded.
