Arthur Hayes Forecasts Bitcoin to Dip to $75K Before Surging to $250K by the End of 2025
In a recent analysis, Arthur Hayes, one of the co-founders of the BitMEX exchange, has warned about a potential short-term decline in Bitcoin’s price, possibly falling to the range of $70K-$75K before escalating to $250K by the conclusion of 2025. Hayes suggested in a recent blog post,
“I believe there is a higher likelihood of a Bitcoin correction to $70,000 to $75,000 followed by a surge to $250,000 by the end of the year rather than a continuous upward trend without any significant pullback.”
Hayes attributed his near-term prediction of a ‘30% Bitcoin correction’ to the increasing 10-year Treasury yields and their probable influence on both stocks and cryptocurrencies.
Is Bitcoin Heading for an Extended Correction?
It is essential to understand that a rise in Treasury yields typically indicates restricted liquidity, making assets such as stocks and cryptocurrencies less appealing compared to bonds. Consequently, a rising yield exerts a negative impact on the crypto market, particularly on Bitcoin.
Hayes further highlighted,
“Inflation is currently high and is anticipated to climb in the near future as global economies increasingly diverge. This is why I anticipate a rise in 10-year yields… Stocks will witness a decline.”
Given the strong correlation between U.S. stocks and Bitcoin (recently peaking at 0.70, according to the Pearson 30-day correlation), any downward trend in stocks could also affect Bitcoin’s performance.
Hayes suggested that in a situation of reduced liquidity in the near term, Bitcoin might experience a downturn before U.S. stocks. He stated,
“BTC is highly responsive to global fiat liquidity conditions; hence, if there is an upcoming fiat liquidity crisis, its value will drop before stocks, serving as a leading indicator of financial strain.”
Nevertheless, Hayes pointed out that such financial strain would prompt responses from the U.S., China, and Japan through monetary easing and quantitative easing measures. He estimated a 60% probability of an imminent QE shift in either Q1 or Q2.
“A slight financial crisis in the U.S. would provide the necessary monetary support that the crypto market craves. It would also align with political interests, particularly for individuals like Trump.”
As QE bolsters U.S. liquidity and risk-taking assets, it may potentially propel Bitcoin’s surge to a new record peak of $250K, according to Hayes.
However, Hayes acknowledged that Bitcoin’s ‘Everything Indicator,’ a cumulative metric involving miner profitability, money supply, and network expansion, indicated that Bitcoin was midway through its bullish phase.
Traditionally, readings above 80 (red zone) have denoted previous cycle peaks in 2017 and 2021. With the current reading standing above 50, there appears to be room for further expansion.