Arthur Hayes Sticks to Bold $250K Bitcoin Target, Calls $80.6K the Cycle Bottom
Arthur Hayes is not backing away from his ultra-bullish Bitcoin forecast. The BitMEX co-founder has reiterated his view that Bitcoin can climb to $250,000 by the end of 2025 and argued that the recent drop to around $80,600 marked the bottom of the current correction.
Speaking on the Milk Road podcast, Hayes laid out a macro-focused case for why he believes the worst of the downturn is over and why the broader liquidity environment is turning in Bitcoin’s favor. In his view, markets have just come through a temporary liquidity squeeze—a combination of misunderstood ETF flows and aggressive Treasury funding—that has now largely run its course.
Why Hayes Thinks the Bottom Is In
According to Hayes, Bitcoin’s fall from roughly $125,000 to about $80,000 was not a sign of collapsing long-term demand, but a mechanical reaction to shifting dollar liquidity and the unwinding of basis trades tied to spot Bitcoin ETFs.
He argued that dollar liquidity has effectively bottomed out. With that floor now in place, he believes risk assets like Bitcoin are positioned to move higher as capital gradually returns to the system. In his framework, liquidity trends matter more than short‑term sentiment or isolated headlines.
Hayes pinpoints the $80,600 level as the likely bottom of this corrective phase. From there, he expects Bitcoin to begin building a new base that could eventually support a parabolic move toward his $250,000 target by the end of 2025.
ETF Flows Weren’t “Real” Institutional Demand, Hayes Says
One of Hayes’ core arguments is that the enormous inflows into U.S. spot Bitcoin ETFs were widely misinterpreted. Many retail investors assumed that large banks and funds were finally making long-term directional bets on Bitcoin. Hayes insists that was never the case.
He points to data on the biggest holders of BlackRock’s IBIT ETF, which include names such as Brevan Howard, Goldman Sachs, Millennium, Jane Street, and Avenir. These firms, he stresses, are professional trading shops and hedge funds focused on market-neutral strategies, not Bitcoin believers loading up for the next decade.
“These entities are not places where they’re just going to go long Bitcoin,” Hayes said. Instead, they were primarily running basis trades: buying spot ETF shares and simultaneously shorting Bitcoin futures on the CME. The goal is to capture a relatively low‑risk spread between the ETF’s price and the futures price, not to bet on Bitcoin’s long‑term appreciation.
When funding rates and futures premiums compressed—especially after October 10—the profitability of these trades collapsed. As a result, traders unwound their positions: they sold the ETF shares they had accumulated and closed their shorts by buying back futures. That two-way flow created selling pressure on the ETFs, which many observers incorrectly read as “institutions dumping Bitcoin.”
Retail Misread the ETF Signals
Hayes believes this misunderstanding deeply shaped retail sentiment. To many individual investors, the narrative looked simple: institutions were buying heavily in the summer, then suddenly abandoning Bitcoin in the fall. That apparent reversal scared smaller investors into selling at precisely the wrong moment.
In reality, he argues, those flows had nothing to do with investment conviction or long-term forecasts. They were driven by arbitrage and funding conditions. Once the carry trade stopped paying, the positions were closed. From Hayes’ vantage point, the shake-out was structural, not emotional.
This distinction matters for his bullish thesis. If ETF flows were predominantly basis trades rather than long-term institutional accumulation, their reversal doesn’t say much about Bitcoin’s true adoption curve or its role in portfolios. It just reflects how fast sophisticated traders move when spreads disappear.
The Liquidity Squeeze: Treasury and the Fed in Focus
Beyond ETF mechanics, Hayes highlights an even bigger driver of Bitcoin’s decline: a large, temporary drain of dollar liquidity from the financial system.
After the U.S. debt ceiling saga was resolved, the Treasury Department moved aggressively to refill its cash balance, known as the Treasury General Account (TGA). From July through November, the Treasury raised roughly $1 trillion, pulling money out of money markets and other dollar‑denominated instruments.
At the same time, the Federal Reserve continued its quantitative tightening (QT) program, allowing bonds to roll off its balance sheet and further shrinking the pool of available liquidity. All told, close to $1 trillion was effectively removed from money markets during that period.
For Hayes, this was a perfect storm for risk assets. When cash becomes scarcer and safer yields look more attractive, speculative assets—from high‑growth stocks to crypto—tend to suffer. Bitcoin’s drop from $125,000 toward $80,000, he argues, should be seen through this macro lens rather than as a failure of the Bitcoin thesis itself.
A Turning Point: TGA Nears Target, QT Halted
Hayes believes that storm is now subsiding. The Treasury General Account has climbed to around $900 billion, which is in line with, and slightly above, its stated target level of about $850 billion. In practical terms, the urgent need for the Treasury to keep draining cash from markets has diminished.
More crucially, Hayes points to the Federal Reserve’s decision to stop shrinking its balance sheet. With QT paused, the Fed is no longer actively removing liquidity from the system. According to Hayes, we have reached the low point on what he calls the “liquidity chart.”
“The balance sheet will be kept constant,” he said. “We are essentially bottomed on the liquidity chart and the direction in the future is higher.” In other words, while a flood of new money might not arrive overnight, the most restrictive phase of this cycle appears to be over.
In his view, this pivot in liquidity conditions is exactly what Bitcoin needs to leave the $80,000s behind and begin moving toward new highs.
Looking to 2026: Bank Lending as the Next Engine
Hayes’ outlook extends beyond the end of 2025. He expects that, over time, the primary source of new credit—and by extension, new liquidity—will shift from the central bank to the private banking sector.
Instead of the Fed expanding its balance sheet aggressively, traditional banks may step in with large lending programs, especially targeting the industrial and infrastructure sectors. He cites discussions suggesting that a major bank such as JP Morgan is considering around $1.5 trillion in loans to industrial projects.
If that scale of lending materializes, it could inject a fresh wave of dollars into the real economy. Historically, such expansions in credit have provided a strong backdrop for higher asset prices, particularly for assets that are perceived as scarce or as hedges against monetary debasement, like Bitcoin.
“Once we actually start to see things actually happen,” Hayes said, “then we’ll start to see people price a bigger forward on where this dollar liquidity situation is.” In other words, as investors realize how much liquidity could return through bank lending, they may begin to reprice Bitcoin far higher.
Why a $250,000 Bitcoin Is Plausible in Hayes’ Framework
Hayes’ $250,000 target might sound extreme, but within his framework it follows from a few key assumptions:
1. Liquidity has already bottomed and is set to trend higher as the Fed halts QT and Treasury issuance pressure eases.
2. Risk appetite returns once markets regain confidence that the tightening cycle has ended and credit conditions are loosening.
3. Bitcoin remains the premier macro hedge against currency debasement and financial repression, benefiting from both institutional familiarity and retail enthusiasm.
4. New waves of credit from bank lending in 2026 and beyond supercharge the medium‑term monetary backdrop.
From this perspective, the drop to around $80,600 is part of a normal, if violent, shakeout in a broader bull cycle. If the macro tailwinds align the way Hayes expects, a blow‑off top toward $250,000 by the end of 2025 is, in his view, a realistic extension of Bitcoin’s historical volatility.
What This Means for Investors
For market participants, Hayes’ thesis carries several practical implications:
– Don’t overreact to ETF flows alone. They may mostly reflect arbitrage strategies rather than deep, directional conviction.
– Watch liquidity, not just price. Metrics related to the Fed’s balance sheet, Treasury issuance, and bank lending can offer early clues about the next major move.
– Expect sharp corrections even in bull markets. A 30–40% drawdown, like the slide from $125,000 to $80,000, can occur even on the way to new all‑time highs.
– Separate narrative from structure. Headlines about “institutions dumping” may simply be trade unwinds with little to say about long‑term adoption.
Hayes’ stance does not eliminate downside risk—macro shocks, regulatory shifts, or a deeper recession could all derail the most optimistic scenarios. But his framework suggests that, barring a severe systemic crisis, the structural forces behind Bitcoin’s growth remain intact.
The Broader Macro Backdrop for Bitcoin
Beyond Hayes’ specific predictions, his analysis fits into a wider debate about how Bitcoin behaves in a world of persistent fiscal deficits, aging populations, and structurally higher government spending. Many analysts argue that such an environment makes it difficult for central banks and treasuries to maintain tight monetary conditions for long.
If governments repeatedly return to stimulus, loose financial conditions, or financial repression to manage their debt burdens, scarce digital assets stand to benefit. Bitcoin, with its hard‑capped supply and growing institutional infrastructure, remains the primary candidate for investors seeking exposure to that theme.
At the same time, Bitcoin’s integration into traditional finance via ETFs, derivatives, and custody services means that it now responds even more directly to liquidity cycles and funding markets. That dual identity—as both an alternative monetary asset and a tradeable macro instrument—is at the heart of Hayes’ argument.
Hayes’ Confidence Into Year-End and Beyond
Despite recent volatility and widespread nervousness, Hayes is unshakeable in his outlook. He maintains that the worst of the liquidity squeeze is behind the market, that the ETF drama has been misunderstood, and that the foundations are being laid for Bitcoin’s next explosive move higher.
He remains confident that by December 31, 2025, Bitcoin can reach the $250,000 level. Whether or not the market ultimately validates that number, his thesis underscores a key idea: for Bitcoin, understanding the plumbing of global dollar liquidity may now be just as important as understanding its technology.
For investors and observers alike, Hayes’ perspective offers a clear, if controversial, roadmap for how this cycle could unfold—from the $80,600 bottom he has called out, through a renewed bull phase, and potentially to quarter‑million‑dollar Bitcoin.