Bitcoin Set to Reach $250,000 as ETF Trades Fade, Says Arthur Hayes

Arthur Hayes, co-founder of BitMEX, asserts that Bitcoin's recent dip to $80,000 indicates a liquidity-driven reset’s conclusion rather than the start of a new bear market. He believes that the underlying factors that previously impacted Bitcoin's price are now reversing.

Key Takeaways

Hayes believes Bitcoin's price dipped to $80,000, indicating a market reset rather than a trend toward bearish conditions.
He anticipates Bitcoin reaching $200,000 to $250,000 by the end of the year.
The ETF basis trade that previously supported Bitcoin has faded, contributing to recent price movements.
Macroeconomic conditions, including liquidity and banking policies, are fundamental to Bitcoin's price trajectory.
Hayes expresses confidence in strong altcoins while maintaining a long-term bullish view on Ethereum.

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Hayes discusses various factors influencing Bitcoin's future, arguing that the recent price dip was the bottom. He targets a future price range of $200,000 to $250,000 by year-end, emphasizing shifts in liquidity and macroeconomic policies.

$80,000 Is the New Bottom as Dollar Liquidity Shifts

In a recent episode of the Milk Road Show, released on November 27, Arthur Hayes discussed Bitcoin's price movement. He argued that the much-anticipated US spot ETF “institutional bid” was primarily a leveraged basis trade that has now concluded, coinciding with a bottoming in US dollar liquidity.

“I believe that the recent $80,000 dip in Bitcoin is the bottom,” Hayes stated. “Now, with a relatively supportive liquidity situation for the dollar, we can move higher from here.”

Hayes maintains his prediction of Bitcoin hitting the $200,000-$250,000 range by the end of the year. He reiterated this forecast from his recent essay, “Snow Forecast,” saying, “If I'm wrong, it doesn't matter. I'm long, and I'm happy either way.”

During the recording, Bitcoin was noted to be “back above $90K.” Hayes drew attention to the ETF flow charts that misled retail investors over the spring and summer, highlighting that significant holders of BlackRock’s iShares Bitcoin Trust (IBIT) were not primarily long-term investors.

"These entities aren't just going long on Bitcoin," he explained. "They were executing a standard basis trade: purchasing IBIT, using it as collateral, and shorting CME futures to earn a return."

When the futures basis collapsed after the October 10 liquidation, participants had to sell their ETF shares and cover futures positions, resulting in a shift from strong inflows to outflows in the ETF market. Retail investors misinterpreted this as institutions turning bearish.

"They thought, ‘Institutions loved Bitcoin in the summer, but now they hate it in the fall, so I should sell too,’ without understanding the underlying dynamics,” Hayes remarked.

He also pointed out another factor: Digital Asset Treasury (DAT) companies that sell stock or debt to invest in Bitcoin. When these securities traded at or below their net asset value, further issuance was deemed uneconomical, leading to BTC sales for share buybacks.

Macroeconomic Shifts as a Key Driver

In the broader context, Hayes highlights significant macroeconomic shifts that could influence Bitcoin’s future. He monitors a unique US dollar liquidity index derived from Federal Reserve balance sheet data and commercial banking information. He noted that approximately $1 trillion in liquidity was removed from dollar markets from July onwards due to Treasury General Account (TGA) refills and Federal Reserve quantitative tightening (QT).

In 2023, former Treasury Secretary Janet Yellen managed to counteract this liquidity drain with significant high-yield T-bill issuances. However, in 2025, current Treasury Secretary Scott Bessent lacks similar reserves.

Now, Hayes believes that both the TGA rebuild and QT have reached their limits, indicating that liquidity conditions are set to improve. He sees signs that the TGA is back within its target range and the Fed has paused its balance sheet reduction.

"We’ve effectively hit the bottom of the liquidity chart, and the trend moving forward should be upward," he commented. He added that markets are awaiting how the current administration will fulfill promises of extensive credit creation through industrial polices, bank lending, and a potentially more dovish Federal Reserve.

Hayes anticipates that future liquidity increases will come more from commercial banks rather than directly from the Federal Reserve, citing early indicators of rising bank loans and commitments from institutions like JPMorgan to support large-scale industrial projects.

Addressing the October 10 market decline, Hayes called it a painful lesson for unprepared leveraged traders rather than a coordinated effort to liquidate positions. “Many think that they can make quick profits trading leveraged crypto, but the reality is that they often end up getting liquidated," he stated. “Proper traders should avoid liquidation.”

In terms of his own positioning, Hayes used the post-crash phase to purchase fundamentally strong altcoins such as Pendle, Ethena, and EtherFi at previously seen price levels. He believes these will outperform Ethereum in the short term, while he remains optimistic about the long-term potential of Ethereum, predicting prices might reach between $10,000 and $20,000 by the cycle's end.

At present, Hayes’ core assertion is straightforward: with the ETF basis trade mostly gone, liquidity drain subsided, and leverage cleared out, the macro environment appears to be turning favorable for Bitcoin.

As of now, Bitcoin is priced at $91,004.

Bitcoin price Bitcoin remains above the 0.786 Fibonacci level and the 100-week EMA, as shown in the one-week chart. | Source: BTCUSDT on TradingView.com