Bitcoin under pressure because of the dollar according to Arthur Hayes

The crypto market is wobbling. Bitcoin lost more than 10% in a few days and struggles to regain momentum. Arthur Hayes, a prominent figure in the ecosystem, points to an unexpected culprit: the contraction of dollar liquidity. His thesis challenges conventional analyses and opens a debate on the real drivers of the market.

Bitcoin, a barometer of global liquidity according to Hayes

Arthur Hayes, former head of BitMEX and recognized analyst, does not mince words. For him, Bitcoin reflects neither regulation nor institutional sentiment. It primarily translates expectations on the future money supply.

” Bitcoin is the barometer of the free market in terms of global fiat liquidity “, he writes in an analysis published Monday.

BTC fell below 90,000 dollars Tuesday morning, wiping out all its 2025 gains. Yet, US stock indices like the S&P 500 or Nasdaq 100 are trading near their historic highs. 

This gap worries Hayes. He sees it as a harbinger of an imminent financial crisis. If the stock markets correct by 10 to 20% and interest rates remain high, the US government will be forced to inject massive liquidity.

In this scenario, Hayes projects a Bitcoin between 200,000 and 250,000 dollars by the end of the year. But before that, he anticipates a drop to 80,000 dollars. This forecast is based on the idea that the Federal Reserve and the US Treasury will adopt an expansionary monetary policy to support the economy.

Since April, BTC has risen despite a drop in dollar liquidity, according to Hayes’ indicators. He explains this anomaly by institutional flows to Bitcoin ETFs and the pro-crypto rhetoric of the Trump administration. But this dynamic now shows its limits.

Crypto ETFs, a distorted mirror of institutional flows

Bitcoin ETFs have experienced historic outflows in recent weeks. On November 14, BlackRock’s IBIT, the sector leader, recorded a record outflow of 463 million dollars in a single day. Over the week, international crypto funds collectively lost 2 billion dollars.

For Hayes, these figures do not reveal a rejection of Bitcoin by institutions. They reflect a very specific financial strategy: the “base trade.” This operation consists in buying a Bitcoin ETF while short selling a BTC futures contract. 

Traders profit from the price gap between the two instruments. Five of the largest holders of IBIT are hedge funds like Goldman Sachs or Jane Street, which use these products in an arbitrage logic.

“ The main holders of the largest ETF are not Bitcoin buyers“, Hayes insists. 

“ They short sell a futures contract listed on CME to profit from the gap between the two.” 

In April, JPMorgan estimated the volume of these operations at 400 billion dollars across the entire financial sector.

Today, the “base” has shrunk with the decline of Bitcoin. Inflows into ETFs are decreasing as these strategies become less profitable. Retail investors misinterpret this phenomenon.

They believe institutions are turning away from Bitcoin, whereas they are simply adjusting their arbitrage positions. This confusion creates a vicious cycle: small holders sell, the base contracts further, and institutional flows retreat more.

The current Bitcoin correction is not a capitulation. It reflects a mechanical adjustment of global liquidity. Hayes calls for patience. If traditional markets collapse and the Fed opens the monetary taps, Bitcoin could skyrocket.