Arthur Hayes Predicts BTC Price to Surge in 2026 Amid Dollar Liquidity Expansion

BitMEX co-founder Arthur Hayes has shared a bold prediction for the BTC price, asserting that it may rise in 2026, driven by a rebound in dollar liquidity. In his latest essay, Frowny Cloud, Hayes argues that this year could mark a turning point for Bitcoin despite its struggles in 2025.

Dollar Expansion to Drive Bitcoin Gains, Says Arthur Hayes

In an essay titled “Frowny Cloud,” the co-founder predicted the BTC price surge in 2026, potentially hitting a new all-time high. “Obviously, I believe it will in 2026,” stated Hayes. He added,

“If gold and the Nasdaq have the juice, how is Bitcoin going to get its groove back? Dollar liquidity must expand for that to happen.”

Notably, Arthur Hayes based his prediction on the expansion in dollar liquidity driven by a series of developments. These include the Federal Reserve’s balance sheet expansion through “money printing,” falling mortgage rates, increased commercial bank lending to U.S. government-backed strategic industries, and broader fiscal measures supporting economic growth.

“The US will continue to flex its military muscle, and to do so requires the production of weapons of mass destruction financed by the commercial banking system,” he added.

His latest prediction of Bitcoin hitting an ATH further reiterates his previous statement. As CoinGape reported, Arthur Hayes predicted BTC to hit $500k by the end of 2026.

Traditionally, the expansion of the money supply has a positive impact on Bitcoin. This is due to the fact that investors normally look for riskier assets in inflation period as the dollar is expected to lose its value. With this backdrop, Hayes states that the price drop in 2025 was due to the reduction of dollar liquidity.

BTC Price’s 2025 Struggles Reveal a Liquidity Story

Bitcoin, currently priced at $96,241, had slipped to below $85k in late 2025 following the severe October 11 crypto market crash. Following the crash, Bitcoin saw severe fluctuations, and it struggled to surge past the critical $100k level. Just weeks ahead of the collapse, the BTC price had climbed to its record high of $126k.

In his essay, Arthur Hayes attributed these market dynamics to government intervention and liquidity conditions. He noted, “Through executive orders and government investment, Trump is blunting the free market signals so that capital, irrespective of the real return on equity, floods into everything related to AI.”

Despite the fall of BTC and crypto, this set the stage for the growth of technology stocks. They emerged as the top-performing sector in the S&P 500 with a significant return of 24.6%-6.6%. This marked a notable surge over the overall return of 18%. Hayes added,

“The liquidity didn’t support our crypto portfolios. But let’s not draw the wrong conclusions from Bitcoin’s 2025 underperformance. It was as it always is, a liquidity story.”

According to Arthur Hayes, the significant decline in the BTC price was not a reflection of the crypto but of dollar liquidity. He sees Bitcoin as “monetary technology,” the value of which is deeply tied to fiat currency debasement. “This alone guarantees that Bitcoin’s value is greater than zero,” stated the BitMEX founder.