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The global crypto market reached new heights in 2025, riding on a positive political approach and bullish investor sentiments. Meanwhile, Arthur Hayes isn’t convinced that politics or regulation will decide where crypto goes next. For him, the real driver remains liquidity, and in 2025, he says, markets repeatedly misread where it was coming from.
In an interview with Cryptopolitan, the Maelstrom CIO walked through what surprised him most last year, why a tariff shock under the Trump administration helped mark Bitcoin’s bottom, and why most altcoins were exposed as “zeros.”
Hayes also laid out his base case for Bitcoin at $250,000 and Ether at $5,000 for 2026. However, he warned that the next major move will be dictated by multiple factors. This includes fiscal stress, bank balance sheets, and how quickly liquidity rotates away from vaporware.
Why crypto misread liquidity in 2025?
It turns out that the biggest surprises of 2025 for Arthur Hayes were how much market momentum depended on a single source of demand.
He stated that “DATs emerged as a major catalyst for continued buying pressure on Bitcoin, Ethereum, Solana and other altcoins.” However, “Once that buying power dried up, it was hard to pick it back up.”
Hayes added that “I was surprised by the Liberation Day in April, where the Trump administration’s maximalist tariff position triggered a MOVE Index spike to near-all-time highs, forcing a pivot that effectively bottomed Bitcoin.”
In the past, the Maelstrom CIO has argued that Bitcoin is a “free market signal” for future fiat liquidity. We asked how that thesis fit last year.
He replied that “During the April bottom when the market anticipated the Treasury’s move to reduce bond volatility through buybacks, my thesis was intact.” He added that “Between April and October, most of the inflows into BTC were for basis trades and DAT’s persistent bid even as actual USD liquidity contracted.”
His base case for 2026 remains aggressive. He set baselines for Bitcoin and Ether around $250K and $5K, respectively.
Arthur Hayes on deficits, banks, and next liquidity wave
Hayes highlighted that the precise macro scenario pushing these numbers higher is the Stealth QE triggered by Reserve Management Purchases and the persistent $2.2 to $2.5 trillion US federal deficits that foreigners no longer wish to finance.
He further added that if Bessent successfully implements Supplemental Leverage Ratio exemptions, commercial banks will be allowed to buy treasuries with infinite leverage, effectively turning the banking system into a liquidity firehose.
Bitcoin price went on to hit over $126K on October 7, 2025. Since then, it’s been a very turbulent and downward ride for BTC. Ethereum also loaded up its fresh ATH of almost $5k on August 25, 2025. However, ETH is struggling to keep up with the increased selling pressure.
Amid this, the downside would come from a liquidity drain. “The numbers could head lower if the Treasury General Account refill sucks more liquidity out of the system than the Fed provides,” he said.
Hayes expects that the next leg for crypto is dependent on global liquidity and the pace of fiat money printing. “Regulations are mainly theater and a lagging indicator,” he said.
He sees adoption to follow rather than lead. “While the bulk of money printing is expected in 2026 and 2027 to provide the fuel, on the ground crypto and stablecoin adoption will make this possible.”
Capital will rotate, not vanish
What if liquidity tightens instead? Will there be a sharp shakeout?
He replied, “If liquidity tightens, we may see a pukefest followed by a repricing of crypto assets backed by real revenue,” he said. “Most altcoins are zeros and were exposed as vaporware during the 10/10 event last year.”
This suggests that capital would rotate rather than disappear.
The Maelstrom CIO believes that “The capital graveyard for these shitcoins will grow, but liquidity will rotate into real protocols like Ethena, Pendle, and Hyperliquid that generate actual cashflow and return value to holders.”
Asked what would actually move the needle for institutional participation in the US, Hayes said he is wary of regulation that favors incumbents.
“I don’t want to see overly complicated, prescriptive rules that only benefit large incumbents like Coinbase and Blackrock,” he said. “Bills that benefit decentralized protocols truly help to advance the ethos and innovation of crypto companies.”
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English (US)