Hayes cracks BTC password: Liquidity is the key to reaching new highs in 2026

Arthur Hayes’s latest prediction has attracted market attention. The co-founder of BitMEX points out that whether Bitcoin can reach a new all-time high in 2026 depends not on short-term price fluctuations, but on the expansion trend of US dollar liquidity. He uses a simple yet powerful logic to explain why Bitcoin underperformed in 2025 and why it is expected to rebound strongly in 2026. This viewpoint warrants in-depth understanding.

Liquidity is the true driver of Bitcoin

The lesson of 2025: liquidity contraction drags down BTC

Hayes notes that Bitcoin’s performance in 2025 lagged significantly behind gold and tech stocks, not because Bitcoin itself had issues, but due to a fundamental factor: contraction of US dollar liquidity.

Specific data supports this judgment. In 2025, Bitcoin’s annual decline exceeded 14%, while gold prices rose over 44% during the same period. This divergence may seem contradictory but actually reflects differences in the underlying driving logic of various assets. Gold’s rise stems from the de-dollarization trend among sovereigns, tech stocks’ strong gains are driven by the strategic importance of the AI industry, while Bitcoin’s movements are entirely tied to the cycles of dollar liquidity.

When US dollar liquidity contracts, risk assets generally come under pressure. As a scarce risk asset, Bitcoin is among the first to be affected. This explains why, even with some global economic recovery in 2025, Bitcoin still performed weakly.

How US dollar liquidity determines Bitcoin’s trend

Hayes’s core view is that changes in US dollar liquidity determine the long-term value foundation of Bitcoin. This is not a short-term technical issue but a fundamental macro-financial environment impact.

To make Bitcoin outperform gold and the Nasdaq index again, the prerequisite is that US dollar liquidity re-enters an expansion cycle. If dollar supply cannot continue to increase, risk assets in the market will struggle to gain sufficient upward momentum. This logic has been validated multiple times in history: a loose monetary environment often boosts investors’ allocation to inflation-hedging assets, benefiting Bitcoin.

Why 2026 is expected to rebound: three major liquidity expansion mechanisms

Hayes predicts that US dollar liquidity will significantly rebound in 2026, with three specific mechanisms:

Federal Reserve’s balance sheet expansion

The Fed restarting the “money printing” mode will directly inject more funds into the financial system. This is the most direct source of liquidity. Hayes believes that, to win the upcoming November midterm elections, the Trump administration needs to make the economy “red hot,” which suggests the Fed may adopt a more easing stance.

Strategic lending increase by commercial banks

As the overall financial environment relaxes, commercial banks’ lending behavior will change accordingly. More funds are expected to flow into strategically important industries supported by the US government. This not only increases systemic liquidity but also amplifies the money supply through the multiplier effect.

Lower mortgage rates

The Fed’s money printing will directly lower mortgage rates, stimulating leverage in the real estate market. This will release a large amount of frozen purchasing power, boosting economic activity.

Additionally, Hayes mentions military-related expenditures as a potential source of liquidity. Maintaining influence globally requires long-term fiscal and financial support, which ultimately will be channeled through the banking system, objectively expanding the money supply.

Market confirmation: BTC shows signs of rebound

Currently, Bitcoin is priced at $96,229.12, and recent trends have already reflected market reactions to liquidity expectations. From a time perspective:

• Up 6.63% in the past 7 days
• Up 11.32% in the past 30 days

This indicates the market is gradually digesting the liquidity expansion expectations of analysts like Hayes. Even with weak performance in 2025, Bitcoin has already shown signs of a rebound amid improving liquidity outlooks.

It is worth noting that Hayes himself is also acting to confirm his judgment. He has set his core trading strategy for this quarter to go long on Microstrategy (MSTR) and Metaplanet (3350), using these two stocks as leveraged bets on Bitcoin’s return to an upward trend. This reflects his high confidence in the liquidity expansion in 2026.

Summary

Hayes uses liquidity—a single yet powerful variable—to explain Bitcoin’s past performance and to forecast its future trajectory. The lesson of 2025 is clear: when liquidity contracts, even the best stories cannot support Bitcoin’s rise. The opportunity in 2026 is equally clear: if liquidity expands as expected, Bitcoin, as a scarce risk asset, has a high probability of a strong rebound, potentially reaching new all-time highs.

The key point is that this is not a short-term technical or sentiment-based prediction but is rooted in macro factors such as Federal Reserve policies, bank lending, and the real estate market. If liquidity in these three areas indeed expands as Hayes anticipates, Bitcoin’s rebound will be quite certain. In the coming months, monitoring Fed policy directions, bank lending data, and real estate market performance will be crucial indicators to assess the validity of Hayes’s forecast.