Arthur Hayes Bitcoin Prediction: From $77K BTC Crash to New All-Time High?

Arthur Hayes, former BitMEX CEO, responded to the Federal Reserve maintaining interest rates at 4.5%. He stated the Federal Reserve slowing quantitative tightening marks a significant turning point for Bitcoin’s trajectory. Hayes believes Bitcoin’s recent drop to $77,000 may have represented its absolute price bottom. Hayes Bitcoin prediction anticipates forthcoming liquidity shifts will likely trigger a new and substantial Bitcoin market rally. This outlook is in line with growing market optimism about the impact of friendly regulations.

Bitcoin’s price swiftly climbed 3.5% after the FOMC meeting, signalling restored investor confidence about Fed rate cuts. Hayes insists that quantitative tightening will effectively conclude around April 1, creating new market conditions. He further predicts either a Supplementary Leverage Ratio exemption or a return to quantitative easing soon. Hayes suggests these potential developments could strongly bolster Bitcoin and other assets in the coming months.

Hayes Declares QT as “Effectively Over”

The Hayes Bitcoin prediction consistently emphasizes monetary policy’s significant role in Bitcoin’s price fluctuations. He recently announced quantitative tightening is effectively finished after the Federal Reserve signaled a balance sheet reduction slowdown. Specifically, the central bank will lower its monthly Treasury cap from $25 billion to $5 billion, which Hayes interprets as increased market liquidity soon.

Hayes suggests Bitcoin’s price decrease to $77,000 was a crucial turning point in the market. This view aligns with other analysts who think a quantitative tightening slowdown will lessen liquidity constraints. Bitcoin can potentially recover previous losses as liquidity improves, backing Hayes’ bullish perspective.

The Role of SLR and QE in Bitcoin’s Trajectory

Hayes Bitcoin predictions signal a possible return to quantitative easing or a reinstated SLR exemption amid the quantitative tightening slowdown. During the challenging COVID-19 pandemic, banks enjoyed greater flexibility in holding U.S. Treasury securities thanks to the SLR exemption. Reinstating the SLR exemption may significantly boost both lending and overall market liquidity, indirectly benefiting Bitcoin.

Quantitative easing, involving Federal Reserve asset purchases to inject economic liquidity, would likely drive Bitcoin prices upward significantly. Hayes stressed liquidity injections favour digital assets due to their correlation with M2 money supply expansion. A simple ten percent increase in liquidity might even double Bitcoin’s price, reinforcing Hayes’ optimistic outlook.

Market Sentiment and Broader Implications

Financial markets are showing increased optimism about upcoming Fed rate cuts following the Federal Reserve’s decisions, and crypto figures share Hayes’s positive views. Prominent analysts such as Jamie Coutts and Mark Moss agree that quantitative tightening is effectively finished now. They believe the Federal Reserve’s shift in policy is creating opportunities for a new cryptocurrency bull cycle to begin.

Graph 1 – Published on TradingView, March 20, 2025.

Market indicators further support this change in sentiment across various financial sectors related to cryptocurrency. The Crypto Fear & Greed Index has improved notably. It has moved to neutral territory at 49 points after being in the fear zone for weeks. Bitcoin has demonstrated resilience, surging past $85,000; forecasts suggest it may soon move toward $90,000. These indicators strengthen the case for Hayes’ positive market outlook.

A New Era for Bitcoin?

Hayes’s confidence in Bitcoin’s future heavily depends on his belief in the Federal Reserve’s continued easing of financial conditions. Although analyst Benjamin Cowen argues quantitative tightening is still underway, the slowed pace of balance sheet shrinking is undeniable. The Federal Reserve’s decisions, like potential rate cuts or new asset purchases, will likely determine Bitcoin’s path for the year.

For investors navigating these changes, Hayes delivers a clear message: remain adaptable and prepared for market shifts. With liquidity increases anticipated and monetary policy shifts potentially favoring riskier assets, Bitcoin’s future trajectory appears increasingly bullish. Whether Hayes’s predictions would come true is still uncertain, but current market sentiment is definitely leaning in his favor.