Bitcoin’s value has been fluctuating below the $90,000 mark, with a minor recovery this week. Despite this, Arthur Hayes, the co-founder of BitMEX, maintains his optimism, projecting that Bitcoin could skyrocket to a staggering $250,000 by 2025.
In a recent blog post, Hayes shared his bullish prediction, tying it to a significant shift in US monetary policy. According to Hayes, the Federal Reserve will eventually succumb to political and economic pressures and reinstate quantitative easing (QE). Hayes is confident that this move will cause Bitcoin’s price to soar as the Fed infuses liquidity back into the system to bolster the US economy.
Hayes underscored the Federal Reserve’s recent change of heart regarding the supplementary leverage ratio (SLR) and its balance sheet policy. He anticipates that the central bank will permit banks an SLR exemption, enabling them to hold more Treasury bonds without increased capital requirements. This, in Hayes’ view, equates to Treasury QE, flooding the market with liquidity.
Hayes alludes to Federal Reserve Chair Jerome Powell’s hints at cessation of the Fed’s balance sheet asset roll-off and a statement from Bessent on the impact of SLR removal. These factors could potentially decrease treasury bill yields and increase liquidity by tens of billions of dollars.
Additionally, Hayes addressed the possible inflationary effects of proposed tariffs, noting that Powell’s stance on “transitory” inflation empowers the central bank to continue its monetary expansion policies without trepidation of long-term repercussions, regardless of tariff-induced inflation on goods and services.
Exploring the liquidity dynamics, Hayes drew attention to the US Treasury’s reduced pace of quantitative tightening (QT), from $25 billion per month to a mere $5 billion post-April 1. This results in an annualized liquidity boost of $240 billion, potentially increasing to $420 billion as the year progresses, symbolizing a shift towards more aggressive easing.
Hayes likens these circumstances to the 2008 global financial crisis (GFC), where gold and other commodities thrived as the Fed initiated liquidity injections. He perceives Bitcoin as the current “anti-establishment” asset, poised to reap the benefits from similar liquidity-driven tailwinds that boosted gold in the previous crisis.
Hayes reiterates his $250,000 Bitcoin prediction, arguing that the Fed’s eventual return to QE will uplift the cryptocurrency, given its resilience in fiat currency debasement environments. He believes Bitcoin’s technology and its status as a value store make it the perfect asset to capitalize on the expected liquidity influx.
Despite recognizing market risks, Hayes stands firm in his belief that Bitcoin’s value will skyrocket as the Fed’s monetary policies align with his predictions for a price surge in the upcoming months.
