In a striking declaration that’s capturing market attention, BitMEX co-founder Arthur Hayes has reaffirmed his ambitious Bitcoin price prediction of $250,000 by year-end 2025. The prominent crypto voice identified the recent plunge to $80,600 as the definitive market bottom, citing a crucial shift in global dollar liquidity conditions as the foundation for his optimistic outlook.
Hayes’ analysis, shared during a recent Milk Road podcast appearance, challenges conventional market narratives while pointing to macroeconomic factors that could fuel Bitcoin’s next major rally.
Demystifying the ETF Narrative: Basis Trades, Not Institutional Adoption
Hayes delivered a crucial correction to the mainstream interpretation of Bitcoin ETF flows that dominated market discourse throughout 2025. Contrary to popular belief, he argued that the substantial inflows into products like BlackRock’s IBIT didn’t represent genuine institutional conviction.
“These entities are not places where they’re just going to go long Bitcoin,” Hayes stated, referencing top IBIT holders including Goldman Sachs and Millennium.
Instead, sophisticated institutions were executing basis trades—simultaneously buying the spot ETF while shorting CME futures contracts to capture price differentials. When funding rates collapsed in October, these positions unwound, creating the appearance of institutional abandonment.
“Retail thinks, oh no, institutions love Bitcoin in the summer, and now they hate it in the fall,” Hayes explained, highlighting how misunderstood trading strategies distorted market sentiment.
The Liquidity Turning Point: Why Hayes Sees Green Lights Ahead
The core of Hayes’ bullish thesis rests on a fundamental shift in dollar liquidity conditions. He identified two major factors that previously constrained market liquidity:
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Treasury Department Actions: Between July and November, the U.S. Treasury raised approximately $1 trillion to refill its General Account, effectively extracting this capital from financial markets.
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Federal Reserve Policy: Concurrent quantitative tightening measures removed additional liquidity, creating a combined drain of nearly $2 trillion from dollar money markets.
According to Hayes, this liquidity squeeze has now concluded. With the Treasury General Account approaching its $850 billion target and the Fed ending its balance sheet reduction, “we are essentially bottomed on the liquidity chart and the direction in the future is higher.”
The Path to $250,000: Banking System as the Next Catalyst
Looking beyond immediate liquidity improvements, Hayes anticipates another powerful driver emerging in 2026: bank credit creation. He specifically cited JP Morgan’s discussions around $1.5 trillion in industrial sector lending as a precursor to expanded dollar liquidity.
“Once we actually start to see things actually happen, then we’ll start to see people price a bigger forward on where this dollar liquidity situation is,” Hayes stated, suggesting that markets haven’t yet priced in this forthcoming expansion.
This banking-led liquidity surge, combined with current conditions, forms the foundation for his $250,000 Bitcoin price target. Hayes maintains that the convergence of these factors will overpower technical resistance and sentiment challenges.
Market Implications: Navigating the Road Ahead
For investors and traders, Hayes’ analysis provides a framework that prioritizes macroeconomic liquidity over short-term technical patterns and ETF flow data. His perspective suggests that:
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The $80,600 level likely marked the cycle bottom
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Misunderstood institutional activity created unnecessary panic
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Improving liquidity conditions should support risk assets broadly
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Banking system dynamics will become increasingly important
While Hayes’ prediction remains exceptionally bullish compared to most analyst forecasts, his track record and detailed liquidity analysis ensure his voice carries significant weight in crypto markets. As the year progresses, the evolving liquidity landscape will test whether his ambitious Bitcoin price prediction proves prescient.
