Former BitMEX CEO Arthur Hayes has urged caution among Bitcoin investors, warning that the cryptocurrency may face further downside before benefiting from a broader liquidity-driven rally.
Speaking during a recent interview on the Coin Stories podcast, Hayes said he would delay buying Bitcoin with limited capital until the U.S. Federal Reserve shifts back to monetary easing and resumes large-scale money creation.
Hayes framed Bitcoin’s long-term trajectory around a liquidity cycle he described as shaped by U.S. fiscal policy and central bank actions. According to Hayes, the key catalyst for a sustained rally will be central banks expanding liquidity through renewed money printing.
“If I had $1 to invest right now, would I be putting it into Bitcoin? No. I would wait,” Hayes said during the interview.
He added that his strategy would change once monetary policy loosens and central banks begin expanding the money supply again. In his view, the critical driver behind Bitcoin’s next major move is not geopolitical conflict itself but the monetary response that may follow.
Hayes noted that while some observers argue that war supports Bitcoin’s price, the more relevant factor is the liquidity created through government spending and monetary expansion.
Recent developments at the Federal Reserve may signal an early shift in that direction. In December, the Fed began expanding its balance sheet through what it described as “reserve management purchases.” The action came after strains emerged in short-term funding markets and marked a departure from the quantitative tightening program that had reduced liquidity by about $2.4 trillion since 2022.
Despite that change in policy direction, Hayes said the benefits of increased liquidity have not yet fully appeared in Bitcoin markets.
Hayes also pointed to geopolitical tensions, including the ongoing conflict involving the United States and Iran, as a potential trigger for broader financial market stress. According to him, prolonged conflict could lead to large-scale selling across equities and cryptocurrencies.
He warned that such conditions could push Bitcoin below the $60,000 level, potentially leading to cascading liquidations across the market. Bitcoin briefly traded above $60,000 on Feb. 6 before recovering into an upward trend.
(adsbygoogle = window.adsbygoogle || []).push({});Hayes maintained a positive long-term outlook for Bitcoin, stating that he expects the asset to eventually exceed $100,000 and previously projected a price of $250,000 by 2026.
However, he said it remains uncertain whether the market has reached its bottom. Hayes also suggested that Bitcoin’s recent rebound toward the $74,000 level appears closely tied to movements in U.S. technology stocks, indicating the asset has not yet fully decoupled from traditional markets.
Related: Arthur Hayes Says Iran Conflict Could Trigger Fed Easing, Boost Bitcoin
