Bitcoin's Potential for New Heights in 2026 Driven by Dollar Liquidity, According to Arthur Hayes

Bitcoin may reach new all-time highs in 2026, despite trailing behind gold and tech stocks last year, according to Arthur Hayes, co-founder of BitMEX.

Key Takeaways:

According to Arthur Hayes, Bitcoin’s ascent to new highs relies more on an increase in dollar liquidity than on short-term price movements.
The tight liquidity in 2025 explains Bitcoin’s underperformance compared to gold and tech stocks.
Hayes anticipates that monetary expansion in 2026 will create favorable conditions for Bitcoin.

The future of Bitcoin is not determined by immediate price fluctuations but instead hinges on a renewed increase in dollar liquidity, which Hayes believes is a crucial determinant of Bitcoin's long-term worth.

Bitcoin's Potential for New Heights in 2026 Driven by Dollar Liquidity, According to Arthur Hayes

The Role of Dollar Liquidity in Bitcoin's Performance

In a blog post published on Wednesday, Hayes examined why Bitcoin struggled during 2025 while gold and the Nasdaq Composite Index managed to rise.

His straightforward explanation revolves around liquidity; without a growing supply of dollars, Bitcoin lacks the necessary support for superior performance.

“Dollar liquidity must expand for that to happen,” Hayes stated, reinforcing his expectation for this situation to unfold in 2026.

Hayes identified multiple potential triggers for a significant increase in liquidity. One major factor could be the expansion of the U.S. Federal Reserve’s balance sheet, which would inject additional funds into the economy.

He noted that declining mortgage rates, along with changes in commercial banking practices, may lead to increased lending directed at U.S. government-supported strategic industries.

Military expenditures also factor into Hayes’ thesis. He suggested that the U.S. will continue to assert its global influence, a strategy necessitating large-scale arms production, funded via the banking system.

This military spending, he argued, indirectly promotes monetary expansion and strengthens conditions that favor limited assets like Bitcoin.

Historically, more relaxed monetary conditions have benefitted Bitcoin as investors seek alternatives to fiat currencies that may decline in purchasing power.

Hayes acknowledged that dollar liquidity decreased in 2025, paralleling Bitcoin’s drop during that time. Over the course of the year, Bitcoin prices fell by over 14%, while gold saw an impressive increase of more than 44%.

In contrast, technology stocks had a different trajectory. The sector emerged as the leading performer in the S&P 500, delivering returns that significantly surpassed the broader market.

Hayes attributed this disparity to government intervention, claiming that artificial intelligence (AI) initiatives have essentially been nationalized by both the U.S. and China.

This led to continued investment in AI-related companies, despite traditional market indicators suggesting otherwise.

Bitcoin as Monetary Technology: A Path to $100,000 and Beyond

Even though Bitcoin has underperformed in recent times, Hayes urged against drawing overly pessimistic conclusions. He portrayed Bitcoin as “monetary technology,” with its value deeply linked to the degree of fiat currency debasement.

While this correlation indicates that Bitcoin has inherent value, Hayes suggested that achieving prices near $100,000 necessitates ongoing monetary expansion.

Long-term bullish sentiment remains robust within the crypto community. Venture capitalist Tim Draper recently reiterated his belief that 2026 will be a significant year for Bitcoin, maintaining his ambitious price target of $250,000.

Additionally, Abra CEO Bill Barhydt expressed that Bitcoin stands to gain in 2026 as relaxed monetary policies introduce new liquidity into global markets, potentially reigniting investor enthusiasm after a sustained period of stringent financial conditions.