Hayes: Bitcoin to Stall Until Central Banks Add Liquidity

Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, wrote in a market note dated April 15 titled “No Trade Zone” that bitcoin’s near-term upside will be limited until policymakers inject liquidity to stabilize banks and credit markets amid rising geopolitical and AI-driven risks.

Hayes framed bitcoin’s price as linked to the quantity of money rather than traditional valuation metrics. He asked, “Do you believe the quantity or the price of money is more important when valuing bitcoin? I believe the quantity of money determines the price of bitcoin, not its price.”

Based on that view, the note says bitcoin will struggle during periods of forced deleveraging and only strengthen after authorities expand credit to stabilize financial institutions.

The note highlighted specific risks that could suppress a durable rally. It cited tensions around the Strait of Hormuz and an “AI agentic deflation bomb,” a scenario in which AI-driven productivity gains and job losses put downward pressure on prices and strain consumer credit. Those pressures, the note said, could hit credit quality, weigh on banks, and delay a sustained crypto recovery until regulators or central banks provide liquidity.

Hayes warned that market stress could trigger further sharp selloffs before any recovery. He described investors de-risking and selling bitcoin to meet margin calls, and wrote that only when expectations of a bailout become widespread would bitcoin rise: “Only when things get bad enough will bitcoin rise, as expectations of a bailout become the consensus.”

The note outlined upside scenarios tied to policy action. It said bitcoin “might bounce a bit after the situation reverts to the pre-war status quo” and that the asset “could spike to $80,000 to $90,000” if money printing returns, though an all-clear from the Federal Reserve would be required to risk new fiat. It also warned a liquidity-fueled rally could be short-lived if geopolitical escalation followed, noting the possibility that the destruction of the Iranian state could raise the prospect of a wider war.

Hayes linked his forecast to balance-sheet dynamics, writing that central banks would need to provide liquidity “to plug the black hole in banks’ balance sheets caused by consumer credit defaults” before bitcoin could meaningfully rise. The note emphasized macro liquidity as the primary variable for bitcoin performance rather than interest-rate moves or conventional crypto valuation models.