Arthur Hayes: Bitcoin's 'Dollar Liquidity Anxiety' – What Fate Awaits in the Easing Cycle?
Arthur Hayes analyzes the divergent performance of Bitcoin, gold, and US tech stocks (Nasdaq 100) in 2025, attributing it to shifts in US dollar liquidity and geopolitical factors. While Bitcoin declined due to contracting dollar liquidity, gold surged as central banks, wary of US sanctions after the 2022 Russian asset freeze, accelerated gold accumulation as a reserve alternative. The Nasdaq outperformed despite liquidity contraction because the US government, under Trump, effectively nationalized the AI industry, directing policy and credit to strategic sectors, similar to China's state-capitalist model.
Hayes predicts a reversal in 2026, with three key drivers expanding dollar liquidity: the Fed's new Reserve Management Purchases (RMP) program injecting at least $40B monthly, increased bank lending to government-backed strategic industries, and a $200B mortgage-backed securities purchase to lower rates and stimulate housing. He argues Bitcoin's price is tightly correlated with dollar liquidity and expects it to rally as liquidity expands. His investment strategy includes leveraged Bitcoin exposure through equities like MSTR and Metaplanet, and accumulating Zcash (ZEC).
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