Arthur Hayes: Bitcoin Will Remain Under Pressure Until Fed and Banks Increase Balances

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer of the family office Maelstrom, expects Bitcoin weakness until the US Federal Reserve or banks start expanding their balance sheets. He published his forecast on X along with a chart of the .USDLIQ index, which measures dollar liquidity.

As of November 2, the .USDLIQ index was 32.71 million, 4.49% higher than at the beginning of January. However, it is approximately 0.6% below the October peak of 32.90 million. A central bank or lender's balance grows when it buys assets or expands lending: this adds money to the financial system.

Hayes' comment was brief: "Dollar liquidity is recovering. Expecting BTC weakness until the Fed and/or banks start expanding the balance sheet."

On October 15, Hayes urged opening long positions in Bitcoin and Ether, citing an anticipated multi-trillion-dollar bailout package following the AI data center boom. A few days later, he sold about $22.28 million in cryptocurrencies from Maelstrom's direct price stakes portfolio and confirmed on X that he plans to wait out the market.

Hayes has previously linked cryptocurrencies to the Fed's monetary issuance: in September, he claimed that the weakening of the euro against the yen could indicate issuance that would support the crypto market.

Bitcoin has already fallen below $77,000, according to CoinGecko. In September, it lagged behind liquidity signals: at that time, the price did not reach the record global money supply of $103.66 trillion. Hayes ties Bitcoin's next move to the Fed and banks' balance sheets, rather than liquidity indicators. Until they grow, his forecast remains cautious.