Key Takeaways:
- Arthur Hayes predicts Bitcoin’s price will rise if the US Fed moves to quantitative easing.
- Bitcoin’s future depends on the Fed’s bond buying and rate changes.
- Most traders remain cautious, predicting a smaller price increase for Bitcoin.
BitMEX co-founder and Maelstrom CIO Arthur Hayes has forecasted a major Bitcoin rally.
He believes the cryptocurrency could reach $250,000 by the end of 2025 if the U.S. Federal Reserve pivots to quantitative easing (QE).
Hayes shared his analysis in an April 1 Substack post titled “The BBC,” stating that Bitcoin’s market behavior is largely influenced by expectations surrounding fiat liquidity.
Hayes Believes Bitcoin’s Future Hinges on Federal Reserve Policy Shift
Arthur Hayes wrote in the substack post , “If my analysis of the Fed’s major pivot from QT to QE for treasuries is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end.”
He added that if forced to choose between Bitcoin hitting $76,500 or $110,000 first, he would bet on the latter, drawing a parallel to gold’s performance under similar economic conditions.
On April 1, the Fed reduced its Treasury runoff cap from $25 billion to $5 billion per month while keeping the mortgage-backed securities (MBS) runoff steady at $35 billion.
Fed Chair Jerome Powell disclosed in a February Monetary Policy Report that excess MBS principal payments may be reinvested into Treasuries, effectively maintaining the balance sheet size.
Arthur Hayes believes the excess amounts from the capital injection could trigger a Bitcoin surge.
“Mathematically, that keeps the Fed balance sheet constant; however, that is treasury QE. Bitcoin will scream higher once this is formally announced,” he said.
Arthur Hayes’s Previous Bullish Catalyst and Industry Experts’ Bitcoin Prediction
Arthur Hayes had previously highlighted other bullish catalysts, including the potential return of the Supplementary Leverage Ratio (SLR) exemption, which would enable banks to exclude Treasuries and Fed deposits from their leverage calculations.
This measure, originally introduced in 2020, allowed banks to expand lending and investment, injecting liquidity into markets.
Other analysts have echoed Hayes’ bullish sentiment.
Venture capitalist Tim Draper recently reaffirmed his long-standing prediction that Bitcoin will attain a price of $250,000 per coin by the end of 2025, citing post-halving scarcity and increasing institutional demand as key drivers.
Additionally, market analyst Plan B believes Bitcoin will significantly outperform gold this cycle, arguing that BTC’s scarcity is already twice that of gold.
His model estimates a price range of $250,000 to $1 million, with $300,000 being a “conservative” projection.
Market Sentiment Remains Divided
While Hayes’ forecast aligns with the broader bullish sentiment among crypto advocates, market bets remain cautious.
Data from Polymarket, a prediction platform, shows that only 9% of traders are betting on Bitcoin reaching $250,000 by the end of 2025, while 60% expect it to peak at $110,000.
Bitcoin’s recent market performance has been turbulent, with the cryptocurrency dropping 23% over the past month to trade around $84,640.
Despite short-term struggles, institutional buyers appear to be increasing, with on-chain metrics revealing that Bitcoin Whales have increased their positions. Bitcoin ETFs also had a respite by recording two consecutive weeks of inflow.
Historical patterns suggest that Bitcoin could position itself for a breakout if it bottoms alongside whale accumulation.
As the financial world closely watches the Federal Reserve’s next moves, bitcoin’s price movement now hinges on monetary policy decisions that could shape its future path.
Hayes’ bold prediction represents more than just a price target—it signals cryptocurrency’s growing integration with traditional financial systems.
While many market participants doubt such extreme price jumps will materialize, several factors will shape Bitcoin’s fate.
Central bank decisions, growing institutional interest, and Bitcoin’s core metrics will together decide if the cryptocurrency reaches the high values its supporters predict.
Frequently Asked Questions (FAQs)
Several prominent figures have made bold predictions for Bitcoin’s price, including Tom Lee from Fundstrat, who expects Bitcoin to reach $250,000 by 2025, and Matthew Sigel from VanEck, who projects it could hit $180,000.
The Federal Reserve’s actions, especially when it comes to interest rates and quantitative easing, have a huge impact on Bitcoin and other risk assets. Low interest rates and increased liquidity from Fed policies tend to boost investment in riskier assets, including Bitcoin.
Trade policies, such as tariffs announced by Trump, can create market uncertainty, which may negatively affect Bitcoin. Additionally, recession fears tend to push investors away from risk assets, leading to price drops. However, despite the broader economic challenges, Bitcoin could still benefit if viewed as a hedge against inflation or market instability.
Given the ongoing volatility in the crypto market and the broader economic factors like trade wars and recession fears, it’s plausible that Bitcoin could experience significant price declines, potentially dipping below $66,000.
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