- Bitcoin fell in 2025 because dollar liquidity tightened, not because demand broke.
- Hayes sees $110,000 as the level that flips Bitcoin demand into leveraged equity proxies.
- Strategy and Metaplanet sit near two-year valuation lows versus Bitcoin.
Arthur Hayes claimed in a new post that Bitcoin (BTC) needs dollar liquidity to move in 2026. According to him, in 2025, liquidity tightening is the reason for Bitcoin to fall by 14.4%.
In Hayes perspective, the gap came from policy. Capital stayed in gold and AI-linked stocks while crypto lost support. He expects this to change in 2026.
Through his article ‘Frowny Cloud’, he expressed his opinion. For Bitcoin to break prior highs, the US dollar supply must expand. He expects that expansion through a larger Federal Reserve balance sheet, easier mortgage rates, and more bank lending tied to state-backed industries.
Hayes linked this directly to defense spending and government-directed credit growth. Bitcoin, in his words, prices only one thing, i.e., fiat debasement. Without it, upside stalls. With it, six-figure prices return.
Price Levels and Positioning
As of press time, Bitcoin is trading near $96,400, briefly touching $97,700 before pulling back. The $110,000 is the trigger point in the view of Hayes. Above that level, he expects demand to shift from spot buying into equity proxies.
He also went long on Strategy and Metaplanet, which is known for building its Bitcoin reserves. While tracking their market value against Bitcoin priced in dollars and yen, Hayes noticed that those ratios now sit near two-year lows, down sharply from mid-2025 peaks.
During a bullish phase, Hayes believes that these stocks can outperform Bitcoin due to balance sheet leverage. However, he is avoiding futures and options.
Related: Privacy Coin Zcash Looks to Dynamic Fees to Solve Congestion Crisis as ZEC Rallies Past $400
Underperformance Was a Policy Outcome
In the course of 2025, Dollar liquidity fell, and Bitcoin stumbled, especially in Q4. Hayes rejected the idea that Bitcoin lost relevance in 2025, instead calling the move a liquidity event and not a structural failure.
Under executive orders and public investment, capital flowed into AI regardless of return. Hayes describes this as free-market signals being overridden. The result was tech strength despite tighter money. He expects that divergence to close once liquidity turns positive again.
It is also important to note that Hayes continues to accumulate Zcash. He does not see the full developer exit from Electric Coin Company as bearish. The split allows better products to ship outside a nonprofit structure, as per the former BitMEX exec. He called the recent ZEC price drop, weak-hand selling.
Related: Zcash Price Prediction: ZEC Extends Losses as Price Tests Crucial Support While Governance Debate Intensifies
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Source: https://coinedition.com/bitcoins-2025-decline-was-a-liquidity-event-not-a-failure/
