Bitcoin Predicted to Reach $125,000 by 2026-End on Liquidity Growth

Renowned crypto analyst Arthur Hayes has delivered a bullish outlook for Bitcoin, predicting a price surge to $125,000 by 2026-end. In his latest remarks, he pointed to growing liquidity in the U.S. financial system as the key driver behind this projected rally.

The former CEO of BitMEX highlighted the Enhanced Supplemental Leverage Ratio (ESLR) as a significant regulatory shift that allows major banks to hold lower capital reserves against their assets, potentially unlocking additional lending capacity and boosting overall market liquidity. He estimates that once standard banking multipliers are factored in, the resulting credit expansion could approach $4 trillion.

This wave of liquidity is expected to offset the earlier contraction driven by AI-related job displacement, which Hayes described as a hidden form of credit deflation. The Maelstrom CIO believes that artificial intelligence has become the new 'subprime' cycle, displacing workers and weighing on tech sector revenues. Despite this weakness, he remains optimistic about Bitcoin's prospects.

Hayes also pointed to projected U.S. defense outlays approaching $1.5 trillion as a key driver of new liquidity entering the financial system. He argues that this surge in spending effectively translates into expanded money creation and asset purchases, creating conditions where Bitcoin tends to perform strongly.