The crypto market is faltering. Bitcoin has lost more than 10% in a few days and is struggling to regain its momentum. Arthur Hayes, emblematic figure of the ecosystem, points to an unexpected culprit: the contraction of liquidity in dollars. His thesis challenges conventional analyzes and opens a debate on the real drivers of the market.
In brief
- Arthur Hayes attributes the bitcoin correction to a reduction in global dollar liquidity, not institutional disinterest.
- The founder of BitMEX believes that BTC could fall towards $80,000 before targeting $250,000 by the end of 2025.
- Bitcoin ETFs are experiencing massive outflows, but Hayes says these flows are manipulated by “basis trading” strategies practiced by hedge funds.
Bitcoin, a barometer of global liquidity according to Hayes
Arthur Hayes, former boss of BitMEX and recognized analyst, does not mince his words. For him, bitcoin reflects neither regulation nor institutional sentiment. Above all, it reflects expectations about the future money supply.
“ Bitcoin is the free market barometer of global fiat liquidity “, he writes in an analysis published Monday.
BTC fell below $90,000 on Tuesday morning, erasing all its 2025 gains. However, American stock indices like the S&P 500 or the Nasdaq 100 are moving near their historic highs.
This discrepancy worries Hayes. He sees it as a harbinger of an imminent financial crisis. If equity markets correct by 10 to 20% and interest rates remain high, the US government will be forced to massively inject liquidity.
In this scenario, Hayes projects a bitcoin between 200,000 and 250,000 dollars by the end of the year. But before that, he anticipates a descent towards $80,000. This forecast is based on the idea that the Federal Reserve and the US Treasury will adopt an expansionary monetary policy to support the economy.
Since April, BTC has advanced despite a decline in dollar liquidity, according to Hayes indicators. He explains this anomaly by institutional flows into Bitcoin ETFs and the Trump administration's pro-crypto rhetoric. But this dynamic is now showing its limits.
Crypto ETFs, a distorting mirror of institutional flows
Bitcoin ETFs have suffered historic outflows in recent weeks. On November 14, industry leader BlackRock's IBIT saw a record outflow of $463 million in a single day. Over the week, international crypto funds collectively lost $2 billion.
For Hayes, these figures do not reveal a rejection of bitcoin by institutions. They demonstrate a very specific financial strategy: the “base trade”. This operation involves purchasing a Bitcoin ETF while short selling a BTC futures contract.
Traders take advantage of the price gap between the two instruments. Five of the largest holders of IBIT are hedge funds like Goldman Sachs or Jane Street, which use these products for arbitrage purposes.
“ Major Holders of Largest ETF Are Not Buying Bitcoin “, insists Hayes.
They short sell a futures contract listed on the CME to take advantage of the gap between the two.
In April, JPMorgan estimated the volume of these operations across the entire financial sector at $400 billion.
Today, the “base” has shrunk with the decline of bitcoin. Flows into ETFs are declining as these strategies become less profitable. Individual investors misinterpret this phenomenon.
They believe that institutions are turning away from bitcoin, while they are simply adjusting their arbitrage positions. This confusion creates a vicious circle: small investors sell, the base contracts further, and institutional flows decline further.
Bitcoin's current correction is not a capitulation. It reflects a mechanical adjustment of global liquidity. Hayes calls for patience. If traditional markets collapse and the Fed opens the monetary floodgates, bitcoin could explode higher.
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