Veteran crypto strategist Arthur Hayes remains confident that Bitcoin could reach $200,000–$250,000 by the end of 2025, despite the recent crash from $125,000 to $80,000 and lingering market uncertainty. Speaking on the Milk Road Show on November 26, Hayes described the recent dip as a cycle bottom driven by dollar liquidity shifts, rather than the onset of a bear market.

“I’m going to stick with it,” Hayes said when asked about his target. “If I’m wrong it doesn’t matter… I’m long, I’m still happy either way.”

$80,000 Marks the Liquidity-Driven Bottom

Hayes attributed the recent Bitcoin correction to a liquidity shock in U.S. dollars. According to his Bloomberg-based USD liquidity index, about $1 trillion drained from dollar money markets between July and November, largely due to the U.S. Treasury refilling its account and continued Federal Reserve quantitative tightening.

“Bitcoin ignored that liquidity drain for months because ETF inflows and Digital Asset Treasury (DAT) issuances masked the damage,” Hayes said. Once those flows reversed, Bitcoin “fell down to where it should have been based on the dollar liquidity situation.”

ETF “Institutional Bid” Misunderstood

Hayes also criticized the perception that institutional ETF demand was driving Bitcoin prices. He noted that the largest holders of BlackRock’s IBIT ETF—firms like Brevan Howard, Goldman Sachs, Millennium, Jane Street, and Avenue—were primarily basis traders, not long-only believers in Bitcoin.

“They were taking the IBIT ETF, pledging it with their broker, then selling a futures contract… making 7–10% per year,” Hayes explained. As funding rates dropped in September and October, these traders unwound the strategy, causing ETF outflows that retail investors misread as institutions dumping Bitcoin.

Role of Digital Asset Treasuries

Digital Asset Treasury (DAT) companies, which issue stock and debt to buy Bitcoin when their market NAV trades at a premium, also contributed to recent volatility. When those securities fell to par or discount, DATs could no longer issue new assets profitably, and some had incentives to sell Bitcoin to repurchase shares.

“All we know is that we have essentially bottomed on the liquidity chart, and the direction in the future is higher,” Hayes said.

Liquidity Coming from Commercial Banks

Looking ahead, Hayes expects the next wave of liquidity to come less from the Fed and more from commercial banks, citing early signs of renewed bank lending and political initiatives for a credit-fueled industrial build-out.

Why Bitcoin Remains Near $90,000

When asked why Bitcoin remains around $90,000 despite improving liquidity, Hayes pointed to uncertainty over how aggressively the new U.S. administration will implement credit expansion. Promises regarding bank lending, industrial policy, and the appointment of a new Fed chair remain speculative until actual programs are deployed.

“Once we start to see these policies materialize, markets will price a bigger forward on the dollar liquidity situation, and risk assets like Bitcoin will accelerate their rise,” he said.