Top Highlights
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Market Underperformance: Despite reaching an all-time high of $126,000 in 2025, Bitcoin lagged behind gold and Nasdaq due to declining US dollar liquidity, as noted by BitMEX co-founder Arthur Hayes.
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Key Influences: Hayes pointed out that the contraction in US dollar credit was the primary force impacting Bitcoin’s price, as sovereign nations increased gold purchases amid geopolitical risks.
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Future Outlook: Looking ahead to 2026, Hayes anticipates a rebound in US dollar liquidity driven by expected Federal Reserve balance sheet expansion, potentially supporting Bitcoin and other risk assets.
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Strategic Positioning: Hayes’s firm holds leveraged Bitcoin exposure via equities in Strategy and Metaplanet, predicting they may outperform Bitcoin if it rises above critical price levels.
2025 Was Tough for Bitcoin, But Hayes Sees Recovery Ahead
2025 proved challenging for Bitcoin (BTC). Despite soaring to an all-time high of over $126,000, it ended the year trailing behind gold and the Nasdaq. Arthur Hayes, co-founder of BitMEX, identified shrinking US dollar credit as a key reason for Bitcoin’s underperformance.
In his recent essay, “Frowny Cloud,” Hayes highlighted the critical role of dollar liquidity. He noted that as liquidity tightened, Bitcoin struggled while gold and the Nasdaq thrived. Nations increased their gold purchases amid geopolitical tensions, seeking alternatives to US treasuries. This shift strengthened gold as a global reserve asset.
Looking toward 2026, Hayes anticipates a rebound in US dollar liquidity. He predicts the Federal Reserve will expand its balance sheet through continued money creation, injecting about $40 billion each month. This increase in liquidity could benefit risk assets like Bitcoin.
Historically, BTC’s value aligns with monetary expansion. As the Fed grows its balance sheet and lending activity picks up, Hayes believes Bitcoin may regain momentum. He also revealed his firm’s leveraged investments in Bitcoin through companies like Strategy and Metaplanet, suggesting these could outperform BTC if prices rise.
Hayes compared the relationship between Bitcoin and liquidity flows to patterns in snowfall. With expectations of increased dollar credit in 2026, he expressed optimism for Bitcoin’s recovery alongside other risk assets.
As technology continues to evolve, shifts in economic policies will likely impact the cryptocurrency landscape. With upcoming changes in liquidity, Bitcoin may once again capture attention from investors.
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Disclaimer
This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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