Arthur Hayes: Bitcoin’s slump is down to ‘liquidity’…expects an upswing this year on the back of credit expansion

Arthur Hayes, co-founder of BitMEX, said Bitcoin could return to an uptrend if the U.S. credit expansion cycle accelerates in earnest in 2026.

In a lengthy analysis published on his official Medium channel on the 14th (local time), Hayes explained the divergent 2025 price moves in Bitcoin, gold and U.S. tech stocks through a single variable: dollar liquidity. “As a monetary technology, Bitcoin is the asset that reacts most sensitively to changes in dollar liquidity,” he wrote, adding that “in 2025, the U.S. credit shock was the most important macro variable, and in that environment Bitcoin, as expected, underperformed.”

According to Hayes, gold’s strength is not an inflation hedge but the result of a structural increase in demand from central banks. He said that following the 2008 global financial crisis and the 2022 freezing of Russian assets, countries have come to recognize the risks of holding U.S. Treasuries and are shifting reserve assets into gold. In the process, central banks acted as price-insensitive buyers, allowing gold prices to rise even during periods of tightening dollar liquidity.

By contrast, Hayes attributed the relative strength of U.S. tech stocks—led by the Nasdaq—to what he called the de facto “national-strategic industrialization” of the artificial intelligence (AI) sector. He assessed that President Donald Trump views AI as central to U.S. economic growth and great-power competition, leading to capital allocation that prioritizes strategic importance over profitability. “In a system where the U.S. government is pushing capital in to win in AI, tech stocks can rise independently even if dollar liquidity slows,” he wrote.

He cautioned, however, that this structure could become a longer-term burden for tech-stock investors. If political objectives take precedence over corporate return on equity, capital efficiency can be impaired over time—even if the market is strong initially—as seen in the case of Chinese equities.

Turning to 2026, Hayes emphasized the possibility of a reversal in the direction of dollar liquidity. Citing a resumption of the Federal Reserve’s balance-sheet expansion, increased commercial-bank lending to strategic industries, and lower mortgage rates via purchases of mortgage-backed securities (MBS), he said the U.S. “will have no choice but to expand credit in a way that deliberately overheats the economy.”

If that environment materializes, he argued, Bitcoin would re-enter a rally phase alongside rising dollar liquidity. “It’s wrong to interpret Bitcoin’s weakness in 2025 as a structural failure,” Hayes wrote. “Bitcoin has always been a function of liquidity, and when conditions change, its behavior changes.” He added that he is increasing leveraged exposure not only to Bitcoin itself but also through Bitcoin-holding companies such as Strategy and Metaplanet.