- Hayes warns that US dollar liquidity has fallen by $1 trillion since July.
- BTC could drop to the $80,000-$85,000 range if markets face a credit event, he said.
- Hayes predicted that easing from the Fed and PBOC could send BTC toward $200K-$250K.
Arthur Hayes, co-founder of BitMEX, predicted that Bitcoin could accelerate toward a year-end target between $200,000 and $250,000, but only after a liquidity-driven pullback.
In his latest essay, “Snow Forecast,” Hayes talked about macro conditions lining up near a breaking point that could first push both crypto and stock markets lower before injecting fresh capital in risk assets.
Liquidity Drains, Delays in QE, and a Brewing Credit Event
Hayes does not believe that post-shutdown government operations will quickly restore dollar liquidity. While the US Treasury General Account could decrease by $100 to $150 billion to reach its $850 billion target, he argues this injection is marginal compared to the $1 trillion in liquidity that evaporated since July on his proprietary index.
Meanwhile, the Fed’s decision to stop balance-sheet reduction on December 1 has not yet guaranteed a return to quantitative easing. According to Hayes, markets will only receive clarity when Wall Street Journal reporter Nick Timiraos says that QE has officially restarted.
Related: Arthur Hayes Ranks Zcash as Second-Largest Holding After 920% Surge
Until then, the Standing Repo Facility may be forced to quietly absorb Treasury issuance in “tens of billions,” providing stopgap liquidity but not the support that risk markets are waiting for.
Hayes cautioned that Bitcoin’s recent drop from $125,000 to the low $90,000s, while stock indexes are still sitting near record highs, indicates that something isn’t quite right under the surface. If stocks pull back 10%-20% and the 10-year Treasury yield climbs toward 5%, the situation could quickly turn into a serious credit crunch.
BTC Positioning for Volatility
Hayes revealed that he increased Maelstrom’s USD stablecoin holdings over the weekend and anticipates a pullback in the near future. As reported earlier, Hayes sold over $7.4 million in crypto over the weekend, including 1,480 ETH and several major altcoin positions.
He bashed the current crypto rankings, adding that market participants should be offended “that the third, fourth, and fifth largest cryptos are a USD-derivative, a do-nothing coin on a do-nothing chain, and CZ’s centralized computer.”
The only token he believes can outperform in the short term is Zcash (ZEC) as concerns over privacy erosion amid AI growth and government surveillance continue to rocket. Hayes also added that zero‑knowledge‑based privacy assets belong near the top of crypto rankings.
Related: ETH Whales “Sell the Dip” as Hayes, 10-Year-Old ICO Wallet Move Millions
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