Arthur Hayes forecasts Bitcoin at $125K by year-end

Arthur Hayes, chief investment officer at Maelstrom and a co‑founder of BitMEX, told an audience at Bitcoin Vegas 2026 in Las Vegas that he expects bitcoin to reach $125,000 by the end of the year. He pointed to higher U.S. defense spending and a new bank reserve regime as the main drivers he sees for added liquidity in financial markets.

Hayes outlined three forces he views as reshaping credit conditions: job losses tied to artificial intelligence, the transition to incoming Federal Reserve chair Kevin Warsh, and a regulatory change that lets banks hold fewer reserves against certain assets. He framed those factors as interacting to increase broad credit creation.

On technology and labor, Hayes argued that AI automation has reduced revenue for some software and services companies and that resulting income pressure on salaried workers can weaken the loan side of the banking system. He presented data comparing equity and bitcoin performance since bitcoin’s prior peak and described what he called a “quiet credit deflationary event.”

I think it pointed to a credit deflationary event that was not being recognized by a central bank, so they weren’t printing enough money, and bitcoin followed suit,

he said.

Hayes said the U.S.-Iran conflict that began in late February changed that picture. He described the shift as a move from deflationary pressure to an environment of higher fiscal spending tied to defense. Hayes referenced projections for a Pentagon budget near $1.5 trillion and said larger defense outlays raise the government’s borrowing needs, which creates visible demand for lending in construction and industrial sectors. “Bitcoin is now focusing on wartime inflation,” he told the audience.

On Federal Reserve policy, Hayes disputed the idea that the Fed would sharply shrink liquidity under Warsh. He outlined a scenario in which banks swap reserves for Treasurys and repurchase agreements, producing a smaller Fed balance sheet in headline terms while leaving most liquidity in the banking system. “He could get up and tell people that he has engineered a smaller Fed balance sheet,” Hayes observed, noting the net effect for investors could be little change in available credit.

Hayes identified the April 1 implementation of a revised supplemental leverage ratio as a structural change that expands bank lending capacity. He cited an industry estimate that the rule could free about $1.3 trillion in new loans and applied a banking multiplier of roughly three to project about $4 trillion in total credit creation. He said that level of new lending, together with higher defense spending, would more than offset the credit impact he attributes to AI‑related job losses. Hayes also noted that foreign demand for U.S. Treasurys has flattened while total debt has risen, increasing the need for domestic buyers to absorb supply.

To monitor developments, Hayes said he watches commodity futures spreads to assess market stress and follows weekly Federal Reserve data on construction and industrial loans as an early indicator of credit flow. He closed his presentation by restating the year‑end bitcoin target and describing the current period as a transition toward higher liquidity and fiscal spending. “We’ve had some chop. We’ve had a war. Now it’s time to break out,” he said.

I think my end‑of‑year target is around $125,000.