Arthur Hayes, the co-founder of BitMEX, has expressed a bullish outlook for Bitcoin in 2026, urging that an increase in U.S. dollar liquidity is essential for the cryptocurrency to recapture its previous momentum. Hayes outlined several potential catalysts that could signal a significant loosening of monetary conditions next year, emphasizing the interconnected nature of Bitcoin and liquidity.
Bitcoin and Dollar Liquidity: A Critical Connection
Hayes pointed out that the trajectory of Bitcoin is inherently linked to the amount of money circulating in the economy. He noted that the U.S. Federal Reserve’s balance sheet may expand through more aggressive money creation tactics, alongside a predicted drop in mortgage rates as lenders become more accommodating. This environment could entice commercial banks to increase lending, particularly towards industries supported by government initiatives.
In a stark contrast to these potential positive indicators for Bitcoin, Hayes highlighted that the cryptocurrency experienced a notable 15% decline in 2025. During the same period, gold surged by 44%, while technology stocks, driven by a total return of 25% in the S&P 500, outperformed Bitcoin. These trends, according to Hayes, illustrate a broader story about liquidity allocation in financial markets rather than a fundamental weakening of cryptocurrency.
Government Interventions Fueling Tech Sector Growth
In his analysis, Hayes also underscored the pivotal role of government investments into the tech sector, specifically in artificial intelligence. He observed that the U.S. and China have utilized public funds and executive actions to channel resources into tech developments, thereby helping to rally significant capital flows into these sectors, irrespective of their immediate financial returns.
Hayes pointed to U.S. policy under former President Donald Trump as a driving force behind favorable investment conditions for AI, suggesting that such strategies accounted for the robust performance of the Nasdaq even amid Bitcoin’s downturn.
On a more critical note, Hayes raised concerns over ongoing military spending, arguing that the U.S. will continue to leverage its military capabilities, thereby necessitating large-scale production financed through the banking sector. This dynamic, he believes, could further enhance liquidity if the banking sector actively funds large government-backed projects.
Recent Inflation Data Boost Crypto Sentiment
Recent U.S. inflation data has sparked a surge in cryptocurrency prices, as Bitcoin approached the $97,000 mark, marking a 5% increase within 24 hours. Other cryptocurrencies, such as Ethereum, Solana, and Cardano, also saw impressive gains of around 8% during the same timeframe.
The market reacted favorably to the decline in bond yields and a weakened dollar, as lower borrowing costs typically encourage investors to seek out riskier assets.
Bitcoin’s Future Remains Conditional
Hayes emphasizes that for Bitcoin to reap the benefits of potential liquidity increases, continued fiat debasement is essential. He portrays Bitcoin as a monetary technology that appreciates when fiat currencies are strained. However, he cautions that this outlook is conditional upon central banks’ monetary policies. Should they remain tight or if inflation unexpectedly rises, resulting in a policy pivot, Hayes’ optimistic forecast may fail to materialize.
As 2026 approaches, all eyes will be on policy decisions that could significantly reshape the liquidity landscape and, consequently, Bitcoin’s trajectory.
Featured image from Unsplash, chart from TradingView
