Arthur Hayes, co-founder of BitMEX, is maintaining his optimistic forecast for Bitcoin, asserting that the cryptocurrency could reach $250,000 by the end of 2025. His assertion comes despite Bitcoin’s recent decline to approximately $80,600, a level he describes as the market’s bottom.
During an appearance on the Milk Road podcast, Hayes clarified that the recent price drop was not indicative of diminishing institutional interest in Bitcoin. Instead, he identified the movement as a result of “basis trades” unwinding, where entities engaged in complex trading strategies rather than simply buying Bitcoin. He explained that certain funds were executing basis trades, which involved purchasing the BlackRock IBIT ETF while simultaneously selling CME futures contracts.
Hayes emphasized that significant inflows into ETFs this year were often misconstrued as firms purchasing Bitcoin. In reality, major holders of BlackRock’s IBIT ETF, including firms like Brevin Howard, Goldman Sachs, and Millennium, were mostly involved in executing technical trades. As the funding rate collapsed post-October 10, these positions were unwound, leading to ETF sales and futures being bought back. This activity sparked confusion among retail investors, who misinterpreted it as institutional sell-offs. Hayes noted that retail sentiment shifted dramatically, with many believing that institutions’ disinterest in Bitcoin had led to its price decline.
On a broader economic front, Hayes observed improving liquidity conditions, particularly as the US Treasury’s General Account nears $900 billion, approaching its $850 billion target. He noted that the Federal Reserve has concluded its phase of quantitative tightening and that the federal balance sheet is likely to remain stable moving forward. Hayes remarked that the liquidity “chart” is at a bottom, implying that conditions are set to improve in favor of asset prices, including Bitcoin.
Looking ahead to 2026, Hayes predicts that bank lending will take the reins in credit creation, pointing out recent discussions from JPMorgan regarding a potential $1.5 trillion in lending to the industrial sector. He believes that as tangible financial activities manifest, market participants will begin to adjust their expectations for future liquidity.
Despite the recent volatility, Hayes remains confident that Bitcoin will achieve his ambitious target of $250,000 by December 31, 2025.
