BitMEX co-founder Arthur Hayes has shared a bold prediction for the BTC price, asserting that it may rise in 2026, driven by a rebound in dollar liquidity. In his latest essay, Frowny Cloud, Hayes argues that this year could mark a turning point for Bitcoin despite its struggles in 2025.
Dollar Expansion to Drive Bitcoin Gains, Says Arthur Hayes
In an essay titled “Frowny Cloud,” Arthur Hayes predicted the BTC price surge in 2026, potentially hitting a new all-time high. “Obviously, I believe it will in 2026,” stated Hayes. He added,
Notably, Arthur Hayes based his prediction on the expansion in dollar liquidity driven by a series of developments. These include the Federal Reserve’s balance sheet expansion through “money printing,” falling mortgage rates, increased commercial bank lending to U.S. government-backed strategic industries, and broader fiscal measures supporting economic growth. He added, “The US will continue to flex its military muscle, and to do so requires the production of weapons of mass destruction financed by the commercial banking system.”
His latest prediction of Bitcoin hitting an ATH further reiterates his previous statement. As CoinGape reported, Arthur Hayes predicted BTC to hit $500k by the end of 2026.
Traditionally, the expansion of the money supply has a positive impact on Bitcoin. This is due to the fact that investors normally look for riskier assets in inflation period as the dollar is expected to lose its value. With this backdrop, Arthur Hayes states that the BTC price drop in 2025 was due to the reduction of dollar liquidity.
Bitcoin’s 2025 Struggles Reveal a Liquidity Story
Bitcoin, currently priced at $96,241, had slipped to below $85k in late 2025 following the severe October 11 crypto market crash. Following the crash, BTC saw severe price fluctuations, and it struggled to surge past the critical $100k level. Just weeks ahead of the collapse, the BTC price had climbed to its record high of $126k.
In his essay, Arthur Hayes attributed these market dynamics to government intervention and liquidity conditions. He noted, “Through executive orders and government investment, Trump is blunting the free market signals so that capital, irrespective of the real return on equity, floods into everything related to AI.”
Despite the fall of BTC and crypto, this set the stage for the growth of technology stocks. They emerged as the top-performing sector in the S&P 500 with a significant return of 24.6%-6.6%. This marked a notable surge over the overall return of 18%. Hayes added,
According to Hayes, the significant decline in the BTC price was not a reflection of the crypto but of dollar liquidity. He sees Bitcoin as “monetary technology,” the value of which is deeply tied to fiat currency debasement. “This alone guarantees that Bitcoin’s value is greater than zero,” stated the BitMEX founder.
Source: https://coingape.com/arthur-hayes-predicts-btc-price-to-surge-in-2026-amid-dollar-liquidity-expansion/
