Why Hayes Thinks Bitcoin Can Hit $250K on Liquidity Shift

• Hayes argues Bitcoin’s October reset was driven by a sharp USD liquidity contraction.
• ETF basis trade unwinds distorted flows, masking true liquidity pressure until late.
• Hayes sees rising liquidity ahead, framing $250K as a stress test of BTC’s reaction.

Bitcoin’s latest volatility has placed Arthur Hayes’ thesis under focus after he repeated his $200,000–$250,000 target during a Milk Road Show episode recorded on November 26. The episode outlined how the October drop was tied directly to a sharp liquidity drain in U.S. dollar markets. Hayes argued that the reset occurred because Treasury actions and Federal Reserve tightening pulled nearly $1 trillion out of money markets over several months.

According to him, Bitcoin held up only because ETF inflows and Digital Asset Treasury issuances temporarily offset the liquidity pressure. This explanation leads to whether Bitcoin consistently reacts when macro liquidity shifts direction. 

Hayes said the October 10 washout pushed BTC back to levels that matched the liquidity environment at the time. He viewed this as a classic adjustment that aligned with earlier cycles in which liquidity contraction led to delayed price compression.

Hayes used this setup to explain the turning point he tracks through his proprietary liquidity index. He argues that the index bottomed once the Federal Reserve paused its balance-sheet runoff and the U.S. Treasury rebuilt its TGA to the desired level. He described the current point as similar to earlier inflection zones where Bitcoin historically repriced quickly once liquidity moved upward.

ETF Basis Trade Unwind Changed the Market Tone

However, Hayes said the structural unwind of leveraged ETF basis trades misled many retail traders about market direction. He highlighted positions from firms like Brevan Howard, Millennium, Goldman Sachs, Avenue, and Jane Street to show that the flows were not long-term allocations. These firms bought BlackRock’s iShares Bitcoin Trust while shorting CME futures for a yield between 7% and 10% annually.

As funding conditions changed, the basis trade became less profitable, which prompted managers to sell ETFs and buy back futures to exit the strategy. Hayes said retail investors assumed these outflows showed institutional bearishness, even though the institutions were closing a structured trade.

This deformation in flows matters for the liquidity-cycle analysis because it masked the true impact of the tightening period until the unwind occurred. The market then reacted sharply, showing how Bitcoin reprices when temporary support fades during a liquidity downturn.

Related: Arthur Hayes Predicts Perpetual Futures Will Reshape Markets

Macro Change and the $250K Case Study

Hayes projected that U.S. dollar liquidity will rise as the Treasury reduces pressure and the Fed prepares to exit quantitative tightening. Analysts expect QT to end on December 1, while rate-cut probabilities for early December remain high. He said commercial banks could add to liquidity if lending rises to support industrial spending plans announced by the new administration.

This creates the basis for evaluating his $250,000 call not as a target but as a stress test for Bitcoin’s response to a liquidity upturn. In earlier cycles, Bitcoin repriced quickly once liquidity expanded, though the magnitude varied. Hayes said the move from $90,000 depends on whether political promises about credit creation translate into measurable flows.

He noted that Bitcoin remains near $90,000 because markets still wait for confirmation of large-scale liquidity measures. According to him, risk assets often accelerate only after concrete action begins, not after policy statements. That uncertainty places focus on how quickly liquidity expansion will materialize and whether the reaction will match earlier transitions.

Hayes’ stance places Bitcoin within a wider liquidity framework that shaped previous market cycles. His thesis highlights the October reset, the ETF trade unwind, and the current monetary change that could push liquidity upward. These factors together form the core case study on how Bitcoin may reprice if another expansion phase begins.