Arthur Hayes maintains his $250,000 Bitcoin price target by year-end and called the recent dip to $80,600 the market bottom.
Summary
- Arthur Hayes says Bitcoin bottomed at $80.6K and still expects a $250K finish to 2025.
- Hayes says ETF flows were basis trades unwinding, not true institutional demand.
- Improving dollar liquidity and the end of QT support Hayes’ bullish $250K outlook.
The BitMEX co-founder told the Milk Road podcast that dollar liquidity has bottomed and will now support higher prices for risk assets.
Hayes explained that Bitcoin (BTC) fell from $125,000 to $80,000 after misunderstood ETF flows reversed and the U.S. Treasury refilled its checking account.
The Treasury raised roughly $1 trillion from July through November, extracting liquidity from markets.
Combined with the Federal Reserve’s quantitative tightening program, close to $1 trillion left dollar money markets.
ETF inflows driven by basis trades, not institutional demand
Hayes disputed the narrative that Bitcoin ETF inflows meant genuine institutional buying. Bloomberg data shows Brevin Howard, Goldman Sachs, Millennium, Jane Street, and Avenir comprise the top five holders of BlackRock’s IBIT ETF.
“These entities are not places where they’re just going to go long Bitcoin,” Hayes said. The funds were executing basis trades, buying the IBIT ETF while selling CME futures contracts against it.
When the funding rate collapsed after October 10, these traders unwound positions by selling the ETF and buying back futures. “Retail thinks, oh no, institutions love Bitcoin in the summer, and now they hate it in the fall,” Hayes explained. “
Therefore, I need to get rid of my exposure as well, not understanding what was driving those flows in the first place.”
Liquidity picture improves as Treasury refilling completes
The Treasury General Account has reached approximately $900 billion, nearing its $850 billion target. More important, the Fed has ended quantitative tightening.
“The balance sheet will be kept constant,” Hayes said. “We are essentially bottomed on the liquidity chart and the direction in the future is higher.”
Hayes expects bank lending to drive credit creation in 2026 rather than the Federal Reserve. JP Morgan has discussed $1.5 trillion in lending to the industrial sector.
“Once we actually start to see things actually happen, then we’ll start to see people price a bigger forward on where this dollar liquidity situation is,” Hayes stated. He remains confident Bitcoin will reach $250,000 by December 31.
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