Former BitMEX CEO Arthur Hayes has outlined a bearish short-term outlook for Bitcoin BTC/USD, predicting a significant correction to the $70,000 to $75,000 range before a major rally to $250,000 by the end of the year.
What Happened: In his latest essay, Hayes cites subtle changes in central bank balance sheets, the rate of banking credit expansion, the relationship between US 10-year treasury yields, stocks and Bitcoin prices and the “insane” Trump TRUMP/USD meme coin price action as reasons for his diminished bullishness
He added that this feels very similar to how he felt before the crypto crash of 2021.
Hayes believes that the current level of market bullishness is overextended and that a pullback of this magnitude is “ugly.”
Even though President Donald Trump continues to support crypto sentiment through executive orders and his recent meme coin launch, these actions were mostly expected.
He argues that what is not being fully appreciated is “the slowdown in filthy fiat creation” from the US, China and Japan.
“I don’t believe this bull cycle is over; however, on a forward-looking probabilistic basis, I think we are more likely to go down to $70,000 to $75,000 Bitcoin and then rise to $250k by the end of the year than to continue girding higher with no material pullback,” he said.
Why It Matters: He elaborates on his view of U.S. monetary policy, stating, the 10-year treasury yield will rise to between 5% and 6%, “and will trigger a mini-financial crisis.”
Hayes further explains that the U.S. Federal Reserve “hate Trump,” but “will do what is necessary to safeguard Pax Americana’s financial system.”
Hayes further argues, “Simply put, a mini financial crisis in the U.S. would provide the monetary mana crypto craves. It would also be politically expedient for Trump.”
Hayes notes the importance of bank credit creation, as he believes that if the pace of credit creation disappoints then the markets will give back the “Trump bump”.
Hayes argues that in the long term Bitcoin is uncorrelated with stocks, but it has a short-term correlation, which could lead to a break down in price before that of stocks.
The markets are now in “full panic mode” as investors assess their bullish case for NVIDIA and U.S. tech exceptionalism because of the launch of DeepSeek.
“The DeepSeek freak-out by Western investors could be the catalyst for them to freak-out about the terrible fiat liquidity situation at present and the secular rise in the 10-year treasury yield,” he claimed.
Ultimately, Hayes is still bullish and believes that this is the time for his company, Maelstrom, to “buy the dip” on quality memes.
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