Arthur Hayes believes Bitcoin\u2019s October flush to $80,000 marked the end of a liquidity-driven reset, not the start of a new bear market \u2013 and that the structural forces that pushed BTC down are now reversing.<\/p>\n
In a Milk Road Show episode<\/a> recorded November 26 and released November 27, the BitMEX co-founder argued that the much-celebrated US spot ETF \u201cinstitutional bid\u201d was largely a leveraged basis trade that has now run its course at the same time as US dollar liquidity appears to have bottomed.<\/p>\n \u201cAnd so that\u2019s why I believe that the $80,000 dip on Bitcoin recently is the bottom,\u201d Hayes said. \u201cAnd now we\u2019re going to have a supportive liquidity situation, at least marginally on the dollar, and we\u2019re bottom here and can go higher.\u201d<\/p>\n Hayes is still openly targeting a blow-off move into the $200,000\u2013$250,000 range by year-end, repeating the call from his recent \u201cSnow Forecast\u201d essay. \u201cI\u2019m going to stick with it,\u201d he said. \u201cIf I\u2019m wrong it doesn\u2019t matter. I\u2019m long, right? I\u2019m still happy either way. It\u2019s either $200k\u2013$250k or not.\u201d<\/p>\n At the time of recording, the host noted Bitcoin was \u201cback above $90K.\u201d Hayes said ETF flow charts that dominated crypto social media in the spring and summer badly misled retail. He pointed to the largest holders of BlackRock\u2019s iShares<\/a> Bitcoin Trust (IBIT) \u2013 Brevan Howard, Goldman Sachs, Millennium, Avenue, Jane Street \u2013 as evidence that the dominant players were not long-only allocators.<\/p>\n \u201cThese entities are not places where they\u2019re just going to go long Bitcoin,\u201d he said. Instead, they were running a standard basis trade: buying IBIT, pledging it as collateral and shorting CME futures. \u201cThey were making, let\u2019s call it 7 to 10% per annum on that trade. They fund Fed funds at four-ish percent and they lever it up.\u201d<\/p>\n When the futures basis collapsed following the October 10 liquidation cascade, that trade had to be unwound by selling the ETF and covering futures shorts, flipping net ETF flows<\/a> from strong inflows to outflows. Retail investors misread that as \u201cinstitutions turning bearish.\u201d<\/p>\n \u201cRetail thinks, \u2018Oh no, institutions loved Bitcoin in the summer and now they hate it in the fall, therefore I need to get rid of my exposure as well,\u2019 not understanding what was driving those flows in the first place,\u201d Hayes said.<\/p>\n He paired this with a second temporary pillar: listed digital asset treasury (DAT) companies<\/a> that issue stock or debt to buy Bitcoin. Once those vehicles traded at net asset value or a discount, new issuance became uneconomic and in some cases incentivized selling BTC to buy back shares, removing another marginal buyer.<\/p>\n Against that micro backdrop, Hayes situates a much larger macro shift. He tracks a proprietary US dollar liquidity index built from Fed balance sheet series and commercial bank data. In his telling, roughly a trillion dollars of liquidity was drained from dollar money markets from July onward due to Treasury General Account (TGA) refilling<\/a> and Federal Reserve quantitative tightening.<\/p>\n In 2023, then-Treasury Secretary Janet Yellen could offset that drain by issuing huge amounts of high-yielding T-bills that pulled about $2.5 trillion out of the Fed\u2019s reverse repo facility back into the system. In 2025, he argues, Treasury Secretary Scott Bessent had no such reservoir to tap.<\/p>\n Now, Hayes says, both the TGA rebuild and QT have effectively run their course. The TGA has been restored to its target zone, and the Fed has halted balance sheet runoff.<\/p>\n \u201cWe have essentially bottomed on the liquidity chart and the direction in the future is higher,\u201d he said, adding that markets are still waiting to see how the Trump administration actually delivers on promises of massive credit creation via industrial policy, bank lending and a more dovish Fed.Macro Conditions Are The Key Catalyst<\/h2>\n
\nHe expects the next leg of liquidity to come more from commercial banks than the central bank, citing early signs of rising bank lending and public commitments from institutions like JPMorgan to finance large industrial programs.<\/p>\n