Despite gold's impressive 120% surge in 2025, Bitcoin experienced a period of underperformance. However, Arthur Hayes, the co-founder of BitMex, anticipates a substantial return of dollar liquidity in 2026, which he believes will propel Bitcoin's value upward. Hayes, now CEO of Professional Capital Management, recently offered his insights into Bitcoin's subdued performance last year, attributing it to a contracting money supply, a factor he contends directly influences the cryptocurrency's trajectory. Gold's rally, conversely, was fueled by central banks divesting U.S. treasuries, a trend intensified by geopolitical events, while tech stocks benefited from a national emphasis on AI.
Looking ahead, Hayes identifies three critical factors expected to inject significant capital into the system, starting immediately. The Federal Reserve has ceased its balance sheet reduction and initiated a new program that will add at least $40 billion monthly to the markets. Concurrently, JPMorgan Chase & Co. has launched a $1.5 trillion loan program targeting strategic industries, a move that instantaneously generates new money through bank lending, which turned positive in Q4 2025. Furthermore, President Trump's directive for Fannie Mae and Freddie Mac to acquire $200 billion in mortgages is set to lower rates, enabling homeowners to leverage their equity, thereby acting as an electoral stimulus.
The underlying reason for gold's remarkable ascent in 2025 can be gleaned from December's trade data, which showed an 11% reduction in the U.S. trade deficit, largely attributable to gold exports. Despite this, retail investment in gold remains low, indicated by shrinking SPDR Gold Trust holdings, suggesting the true frenzy has yet to begin. Hayes projects gold could reach $12,000 if central banks continue their current purchasing pace. Seizing on this impending liquidity wave, Hayes has strategically invested in companies like Strategy Inc. and Metaplanet Inc., which use borrowed funds to acquire Bitcoin. These companies' stocks are currently trading near two-year lows relative to Bitcoin's price, and Hayes expects them to significantly outperform if Bitcoin reaches $110,000, given their leveraged positions. He remains heavily invested, confident that the imminent liquidity influx makes this a compelling opportunity.
The financial landscape is dynamic, and understanding the interplay between traditional assets and new-age cryptocurrencies like Bitcoin requires keen insight. Hayes's analysis highlights the importance of macroeconomic factors, particularly dollar liquidity, in shaping the future of digital currencies. His proactive investment strategy underscores a belief in Bitcoin's potential to thrive in an environment of expanding money supply, presenting a compelling case for its future growth and illustrating the power of foresight in investment decisions.