Analysis of Bitcoin's Performance and Future Outlook
Bitcoin is anticipated to reach new all-time highs, despite its underperformance against gold and tech stocks in the past year. Arthur Hayes, co-founder of BitMEX, attributes this potential surge to the projected expansion of monetary conditions. Hayes stated, "If gold and the Nasdaq have the juice, how is Bitcoin going to get its groove back? Dollar liquidity must expand for that to happen." He further elaborated, "Obviously, I believe it will in 2026."
Hayes identified several key factors that could lead to a significant increase in dollar liquidity by 2026. These include the expansion of the US Federal Reserve’s balance sheet through increased money printing, a decrease in mortgage rates as liquidity loosens, and a greater willingness from commercial banks to lend to US government-backed strategic industries.
Geopolitical Factors and Monetary Policy
Hayes believes that the United States will continue to assert its global influence through military actions. He stated, "The US will continue to flex its military muscle, and to do so requires the production of weapons of mass destruction financed by the commercial banking system." This assertion suggests a potential for increased government spending and, consequently, monetary expansion.
Monetary expansion is generally considered a positive indicator for Bitcoin. As the value of the US dollar potentially decreases due to inflation, investors are often drawn to riskier assets, such as cryptocurrencies, in search of higher returns.
Hayes noted that while dollar liquidity decreased in 2025, leading to a decline in Bitcoin's price, the Nasdaq did not experience a similar downturn. He attributed this resilience to the "nationalization" of artificial intelligence (AI) by both China and America. He explained that through executive orders and government investment, leaders like Trump are influencing market signals to direct capital towards AI-related ventures, regardless of the real return on equity.
Performance Comparison: Tech Stocks, Bitcoin, and Gold in 2025
In 2025, technology stocks emerged as the top-performing sector within the S&P 500. These stocks delivered a total return of 24.6%, outperforming the S&P 500 Index's overall return of 18% by a significant margin of 6.6%.
In contrast, Bitcoin (BTC) experienced a decline of 14.40% throughout 2025. Gold, however, saw a substantial surge, appreciating by 44.40% over the same period.
Hayes clarified that the lack of liquidity in 2025 did not adequately support cryptocurrency portfolios. He emphasized that Bitcoin's underperformance during that year should not lead to incorrect conclusions, stating, "It was as it always is, a liquidity story."
The Intrinsic Value of Bitcoin
According to Hayes, Bitcoin functions as "monetary technology" and its value is intrinsically linked to the extent of fiat currency debasement. He posited, "This alone guarantees that Bitcoin’s value is greater than zero. But for Bitcoin to be worth close to 100,000 United States of American Dollars requires continuous fiat monetary debasement." This perspective highlights the role of inflation and currency devaluation in driving Bitcoin's perceived value.