- Bitcoin’s price struggles below $90,000, with a potential rise to $250,000 by 2025.
- Arthur Hayes predicts Bitcoin’s value will surge as the Fed resumes quantitative easing.
- Reduced quantitative tightening could inject $240 billion in liquidity, benefiting Bitcoin.
Bitcoin has faced significant market struggles this week. Despite a slight recovery, its price remains well below $90,000. Economic uncertainties and cautious traders have weighed heavily on the cryptocurrency. However, Arthur Hayes, co-founder of BitMEX, believes Bitcoin has the potential to surge to $250,000 by the end of 2025, driven by changes in U.S. monetary policy.
Hayes’ Bold Prediction
Hayes made a bold prediction about Bitcoin’s future. He explained that the Federal Reserve is likely to return to quantitative easing (QE). This, he believes, would flood the market with liquidity, causing Bitcoin’s price to rise dramatically. Hayes argues that economic and political pressures will force the Fed to adopt QE again, much like the central bank did in past crises.
Hayes identifies some of these changes to include the Fed on the supplementary leverage ratio (SLR). He opines that the Fed will let financial institutions retain more of the treasuries while tightening the capital regulation. Hayes pointed out that this would facilitate treasury QE. Further, with an increase in the overall liquidity, Bitcoin would also benefit.
Based on the comments of Jerome Powell, Chairman of the FOMC, indicating that the Fed may have halted balance sheet reductions, Hayes believes this shift could inject billions into the market, increasing liquidity and potentially driving Bitcoin’s value higher.
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Impact of Proposed Tariffs
In addition, Hayes discussed the potential inflationary impacts of proposed tariffs. While Powell has said that inflation from tariffs would be “transitory,” Hayes sees the Fed’s commitment to easing as a key factor. He argues that the Fed will continue to pursue policies that benefit Bitcoin, even if inflation rises temporarily.
The BitMEX co-founder also pointed to the U.S. Treasury’s recent move to reduce its quantitative tightening (QT) program. After April 1, the Treasury cut its QT pace from $25 billion per month to just $5 billion. Hayes predicts this reduction will result in a $240 billion liquidity boost annually, potentially rising to $420 billion by the end of 2025.
Drawing comparisons to the 2008 global financial crisis, Hayes believes Bitcoin could follow the same path as gold. During the crisis, gold benefited from the Fed’s liquidity injections. Now, Hayes sees Bitcoin as an “anti-establishment” asset poised to rise amid similar conditions. Nevertheless, Hayes stands his ground on his prediction in the market despite the volatility.
