Dollar Liquidity to Drive Bitcoin Boom
Arthur Hayes, former CEO of BitMEX, has made a bold prediction: Bitcoin could see a significant rally in 2026. In his latest essay, Hayes explains how expanding U.S. dollar liquidity could serve as the fuel for a fresh crypto bull market. According to him, several financial factors are aligning that may push Bitcoin prices higher.
Hayes outlines that the U.S. Federal Reserve is expected to increase the size of its balance sheet once again in 2026. This move would inject more dollars into the financial system, increasing liquidity across markets. When there’s more cash in circulation, investors often seek alternative assets like Bitcoin as a store of value or hedge against inflation.
Key Factors Behind the Prediction
Hayes identifies three main components that will likely increase dollar liquidity:
- Federal Reserve Balance Sheet Growth: The Fed may expand its balance sheet to stimulate the economy, similar to what was seen during previous economic slowdowns. This tends to benefit risk assets like Bitcoin.
- Increased Bank Lending: As banks lend more, money circulates faster in the economy. This liquidity can find its way into crypto markets, especially if investors are seeking high-return opportunities.
- Falling Mortgage Rates: A drop in mortgage rates reduces borrowing costs, allowing households to spend and invest more freely. This added financial flexibility can lead to higher investment in digital assets.
All these factors point to a friendlier economic environment for Bitcoin. Hayes believes that by 2026, these trends will converge, setting the stage for a major crypto rally.
NEW: Arthur Hayes predicts Bitcoin will rally as dollar liquidity expands in 2026 through Fed balance sheet growth, bank lending, and mortgage rate drops, in his latest essay. pic.twitter.com/WwPRSZaapf
— Cointelegraph (@Cointelegraph) January 15, 2026
A Bullish Outlook for Bitcoin Investors
If Hayes’ prediction plays out, the next couple of years could be crucial for positioning in the crypto market. With increased dollar liquidity and more accessible credit, Bitcoin may not only recover from any short-term volatility but could also reach new highs.
While predictions in the crypto space should always be taken with caution, Hayes’ thesis adds an insightful macroeconomic perspective. As 2026 approaches, investors and analysts will be closely watching liquidity trends and Fed policies to gauge Bitcoin’s potential trajectory.