Arthur Hayes explains Bitcoin’s rising price linked to U.S. Treasury moves and Federal Reserve policies aimed at increasing market liquidity. He predicts a potential surge to $200,000 driven by these factors. Notably, Hayes sees Bitcoin aligning more with gold rather than tech stocks, capitalising on market conditions and historical trends of capital flow to altcoins post-Bitcoin gains.
On April 21, 2025, while the U.S. stock market faced a $1.5 trillion decline, Bitcoin surged to $88,524, recovering from a prior dip to $74,500. Former BitMEX CEO Arthur Hayes attributes this movement to U.S. Treasury and Federal Reserve policies that are enhancing market liquidity, as examined in his essay, “Ski Cut.” He forecasts that Bitcoin may exceed $110,000 and possibly reach as high as $200,000.
Hayes highlights a crucial strategy implemented by U.S. Treasury Secretary Janet Yellen, which involves increasing the issuance of short-term Treasury bills instead of long-term bonds. This approach directs liquidity from the Federal Reserve’s reverse repo facility into general markets. According to Hayes, this tactical shift represents a form of quantitative easing (QE) without officially being labeled as such. The influx of liquidity has spurred market rallies as investors adapt to these changes.
Recall that, in Q3 2022, Bitcoin was trading below $16,000, leading to fears of a drop under $10,000. Hayes draws parallels to the recent fluctuations of Bitcoin, observing the significant volatility as it fell from $110,000 to $74,500. He suggests that the influence of liquidity on investor sentiment was underestimated then and continues to be overlooked.
The Federal Reserve’s actions also contribute to Bitcoin’s potential rise. In March 2025, the Fed moderated its quantitative tightening (QT) program, which mitigated the decrease of its balance sheet. Hayes considers this to be a positive liquidity influence. Potential future Fed policy changes, such as exempting certain bank holdings from the supplementary leverage ratio (SLR) or the implementation of a “QT Twist,” could further bolster a conducive environment for Bitcoin’s price growth by stabilising the Fed’s balance sheet.
Hayes posits that Bitcoin is beginning to behave like gold, distinguishing it from tech stocks. On April 21, 2025, gold prices eclipsed $3,500, which coincided with Bitcoin’s rise. His firm, Maelstrom, took advantage of the dip to $74,500 by acquiring more Bitcoin, viewing it favourably against ongoing budget pressures and geopolitical tensions between the U.S. and China. The market capitalisation of Bitcoin contributed to an overall crypto market valuation increase from $2.67 trillion to $2.73 trillion, a gain of $60 billion.
Hayes predicts a trend whereby, upon Bitcoin breaching the $110,000 mark, altcoins are likely to see increased investment. Historical patterns indicate a shift of capital from Bitcoin to alternative cryptocurrencies following major price developments, suggesting that Bitcoin’s liquidity-driven rally could enable this capital rotation.
Recently, Bitcoin experienced a significant breakout, achieving a price peak of $94,270 after overcoming the $88,000 resistance barrier. A strong bullish candle confirmed momentum, with the 20-day simple moving average indicating an upward trend. This breakout signifies Bitcoin’s first notable bullish movement since the post-halving period began in April 2025, backed by high trading volume and supportive macroeconomic conditions. If Bitcoin maintains support at $92,500, it may target $96,000 and potentially approach the $100,000 milestone, presenting bullish trends with opportunities for buyers as pullbacks occur.
