BitMEX co-founder and well-known crypto analyst Arthur Hayes released a market breakdown linking Bitcoin’s decline to worsening dollar liquidity and slowing inflows into ETFs and public treasury-asset companies. In his view, BTC is once again reflecting a real shortage of dollars that has been building since the summer.
Hayes argues that Bitcoin’s rise since April was driven by flows into spot ETFs and into shares of companies managing Digital Asset Treasury (DAT). Large funds, he said, treated ETFs as an arbitrage tool, and once the yield on those trades fell, they exited, triggering heavy outflows and accelerating the downturn.
“They don’t give a f**k about Bitcoin, they only play in our sandbox for a few extra points over Fed Funds,” he wrote.
DAT structures also reduced purchases after their stocks moved from premium to discount.
Hayes believes these flows were masking the contraction in dollar liquidity. With that support now gone, Bitcoin is adjusting to the underlying conditions. He added that his liquidity index has fallen by about $1 T in recent months.
Hayes expects pressure to continue until the Donald Trump administration and Treasury Secretary Buffalo Bill Bessent introduce new stimulus programs. In his interpretation, policymakers face a simple choice: expand issuance or allow a sharp credit contraction that would hit markets and employment.
Maelstrom, Hayes’ fund, has increased its stablecoin allocation in anticipation of lower prices. The only coin he thinks may temporarily outperform the market is Zcash, citing rising demand for privacy.
Hayes sees a possible move down to $80,000–85,000 if market stress intensifies. If money printing accelerates, he believes BTC could reach $200,000–250,000 closer to year-end.
Over the past 24 hours, Bitcoin dropped below $90,000, and market sentiment has fallen into extreme fear with a reading of 11. At the time of publication, BTC is trading at $90,546.
Read also:
- Arthur Hayes: Bitcoin Is Set to Soar Because of Fed Policy
- Arthur Hayes: The Four-Year Bitcoin Cycle No Longer Works
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