Bitcoin Seen Reaching New Highs in 2026 Says Arthur Hayes
Arthur Hayes argues that expanding dollar liquidity—not hype or short-term trends—will be the key catalyst pushing Bitcoin to fresh all-time highs in 2026.
Bitcoin may have underperformed some traditional assets over the past year, but the conditions for its next major rally are already forming, according to BitMEX co-founder Arthur Hayes. In a recent essay published on Jan. 15, Hayes outlined a macro-driven thesis that places U.S. dollar liquidity at the center of Bitcoin’s long-term price trajectory, suggesting that a renewed expansion in 2026 could propel the asset to new record levels.
While Bitcoin lagged behind gold and technology stocks in 2025, Hayes cautioned against interpreting that divergence as a structural weakness. Instead, he framed it as a temporary consequence of tightening financial conditions, which historically have constrained Bitcoin’s upside.
Why Bitcoin Fell Behind Gold and Tech in 2025
Hayes began by addressing a question many investors asked last year: why did Bitcoin struggle while gold and the Nasdaq continued to rise? His answer was blunt—liquidity was moving in the wrong direction.
“Dollar liquidity must expand for that to happen,” Hayes said, referring to Bitcoin’s ability to outperform other major assets.
According to Hayes, 2025 was defined by a contraction in dollar liquidity, creating headwinds for assets that depend on abundant capital and risk appetite. During the year, Bitcoin fell more than 14%, while gold surged over 44%, benefiting from its role as a traditional safe haven amid economic uncertainty.
Technology stocks told a different story. The sector emerged as the strongest performer in the S&P 500, posting gains well above the broader market. Hayes attributed that resilience not to organic market forces, but to direct and indirect government intervention, particularly in artificial intelligence.
The Role of State-Backed AI and Capital Flows
In Hayes’ view, AI has effectively become a strategic national priority for both the United States and China. That dynamic, he argued, has distorted capital allocation.
Rather than responding to interest rates or tightening liquidity, funds continued flowing into AI-linked technology companies due to state support, subsidies, and long-term geopolitical considerations. As a result, tech stocks remained buoyant even as broader financial conditions became less accommodative.
Bitcoin, by contrast, does not benefit from government backing. Its performance, Hayes emphasized, is far more sensitive to the availability of excess dollars in the financial system.
What Could Trigger a Liquidity Expansion in 2026
Looking ahead, Hayes outlined several forces that could reverse the liquidity contraction and create a more favorable backdrop for Bitcoin in 2026.
Key factors include:
- Potential expansion of the U.S. Federal Reserve’s balance sheet, which would directly inject additional dollars into the financial system.
- Declining mortgage rates as financial conditions loosen, freeing up capital and improving credit availability.
- Changes in commercial bank lending behavior, particularly toward U.S. government-backed strategic industries.
- Sustained military and defense spending, which Hayes sees as a structural feature of U.S. global strategy.
Hayes argued that large-scale weapons production and defense initiatives are typically financed through the banking system, contributing indirectly to monetary expansion. Over time, this process reinforces conditions that tend to favor scarce assets such as Bitcoin.
Bitcoin as Monetary Technology
Despite Bitcoin’s uneven performance, Hayes stressed that its fundamental role remains unchanged. He described Bitcoin as “monetary technology,” whose value proposition is tightly linked to the long-term debasement of fiat currencies.
Hayes said Bitcoin’s nature as monetary technology ensures it is worth more than zero, but added that significantly higher prices depend on sustained fiat expansion.
In practical terms, that means ambitious price milestones—such as $100,000—require an environment where money supply growth outpaces economic output. Without that imbalance, Bitcoin may struggle to deliver explosive gains, regardless of adoption narratives or technological progress.
Institutional Signals and ETF Momentum
While Hayes’ outlook focuses on macro conditions, market structure is already showing signs of renewed strength. As of Jan. 15, Bitcoin was trading in the $95,000–$98,000 range, according to CryptoPulse’s Crypto Market Monitor.
That move higher has been supported by a sustained return of capital into U.S. spot Bitcoin exchange-traded funds, signaling a potential structural shift in demand after months of range-bound trading.
Since the start of the year, U.S. spot Bitcoin ETFs have attracted nearly $1.5 billion in net inflows, according to data cited by Bloomberg ETF analyst Eric Balchunas. The inflows followed a multi-day stretch of positive creation activity, reversing the muted ETF demand seen toward the end of 2025.
Market watchers say this trend reflects renewed interest from larger allocators, suggesting that institutional investors may be positioning ahead of a more accommodative monetary cycle.
Bullish Voices Look to 2026
Hayes is not alone in viewing 2026 as a potential inflection point. Longtime Bitcoin bull and venture capitalist Tim Draper has reiterated his belief that 2026 could mark a major breakout year, maintaining his long-standing view that Bitcoin could eventually reach $250,000.
Similarly, Abra CEO Bill Barhydt has pointed to easing monetary policy as a likely catalyst, arguing that fresh liquidity entering global markets could revive risk appetite after an extended period of tight financial conditions.
Together, these perspectives reinforce a broader narrative: Bitcoin’s next major rally may depend less on innovation cycles and more on macroeconomic reality.
As Hayes sees it, Bitcoin does not need to compete with gold or technology stocks on their terms. Instead, it thrives when the global financial system tilts toward monetary expansion, debt growth, and currency debasement. If those forces reassert themselves in 2026, Bitcoin’s underperformance in 2025 may ultimately be remembered not as a warning—but as a setup.
