- Arthur Hayes sees a short-term Bitcoin dip to $90,000 to $ 95,000 amid shifting USD liquidity.
- Regulated bank-issued stablecoins could inject new liquidity into crypto markets.
- Fed policy at Jackson Hole and TGA moves are key catalysts for Bitcoin’s next direction.
Arthur Hayes, co-founder of BitMEX, has warned that Bitcoin may face a short-term correction before resuming its rally. In his recent blog post, Hayes forecasts a possible dip to the $90,000–$95,000 range in the weeks ahead. He attributes this potential decline to shifts in U.S. dollar liquidity and the impact of the Treasury General Account (TGA) on markets. He also points to potential Federal Reserve policy signals at the Jackson Hole summit and upcoming changes in stablecoin regulation.
Hayes contends that the market has yet to incorporate the effects of regulated, dollar-backed stablecoins issued by large U.S. banks. According to him, these new stablecoins will be more important than the current ones, like USDT or USDC. Hayes notes that these tokens will enable banks to accept retail deposits and reserves that are currently being deposited into low-yield accounts.
He describes the introduction of such stablecoins as representing a novel method of injecting liquidity into the market. This would essentially be quantitative easing, although it would not involve direct action by the Federal Reserve. These tokens might be used by the banks to transfer retail money into short-term Treasury bills without the capital rules penalties.
Hayes Warns of Bitcoin Dip Before Liquidity Surge
Hayes points out that it may be a floodgate to liquidity when risk assets such as Bitcoin and technology stocks are unlocked. However, he cautions that before this scenario can unfold, volatility is likely to occur. He anticipates profit-taking and cautious trading as investor waits to see clearer signals from the Federal Reserve.
Before these effects take hold, Hayes expects volatility to persist. He points to the upcoming Jackson Hole Federal Reserve meeting and the status of the TGA refill as two major short-term catalysts. If the process of replenishing the TGA results in a net drain of dollar liquidity, leaving less cash in the financial system, Hayes says Bitcoin could fall to the $90,000 to $95,000 range. Should the TGA refill prove neutral for the market, he anticipates Bitcoin will remain in a range below its all-time high of $112,000.
Hayes’ perspective is related to general trends in the liquidity of the U.S. dollar. When liquidity increases, the supply of stablecoins rises, which is sustainable for crypto prices. As liquidity dries up, redemptions of stablecoins increase, causing pressure on digital assets. The balance of the TGA is a focus of such shifts in liquidity because it influences the amount of cash in the banking system.
The Federal Reserve policy signals also play an important role. In both traditional and cryptocurrency markets, risk-off conditions may occur with hawkish Fed signs, such as further quantitative tightening. Any dovish signals or inferences toward monetary easing will bring digital asset rallies. The Jackson Hole meeting is regarded as one of the important events in giving such signals.
On altcoins, Hayes maintains that these assets generally underperform Bitcoin during periods of macro uncertainty or dollar liquidity tightening. Institutional investors and large market players tend to reduce risk in such environments, favoring either Bitcoin, holding stablecoins, or opting to sit out.
Related: Hayes Says—Bitcoin Holders Must ‘Learn to Love Tariffs’
New Stablecoin Rules Could Unleash Trillions in Liquidity
Regulatory sentiments are changing, and legislatures are promoting new rules governing stablecoins. A recent approval in the U.S. Senate of the GENIUS Act may pave the way for federally regulated stablecoins, potentially allowing banks to issue and manage fiat-backed digital tokens under clear oversight. Hayes believes that legacy banks have a strategic advantage due to this shift in regulation. They possess huge networks in retailing, compliance, and direct access to the Federal Reserve.
If banks allocate even a small portion of their $17 trillion in deposits to stablecoin products. In that case, Hayes estimates that this would result in approximately $6.8 trillion in new demand for U.S. government debt. Such a move, along with some changes in the way the Fed pays interest on reserves, has the potential to flood markets with new liquidity. This action would likely lead to asset inflation in cryptocurrencies and equities.
Hayes believes the next market dip will present a strong buying opportunity. He anticipates that increased liquidity could follow as major banks begin issuing USD-backed stablecoins. In his view, this shift would help drive Bitcoin and other risk assets to new all-time highs. All eyes are now on the Jackson Hole summit, where upcoming signals may shape the next phase of the liquidity cycle.
