Bitcoin News Today: Hayes Calls October Crash a Liquidity Reset, Not Bear Market

Arthur Hayes, co-founder of BitMEX, remains resolute in his prediction that Bitcoin (BTC) could surge to $200,000–$250,000 by year-end despite recent volatility, framing the October–November crash as a liquidity-driven reset rather than a bear market. Speaking on the Milk Road Show, Hayes argued that Bitcoin's drop to $80,000 marked a cycle bottom, driven by a $1 trillion liquidity drain from dollar money markets due to U.S. Treasury refills and Federal Reserve quantitative tightening. He emphasized that Bitcoin's trajectory is tied to liquidity, macroeconomic cycles, and political factors, not halving events.

The market's recent turbulence, including $3.5 billion in ETF outflows and $20 billion in leverage liquidations, has fueled fears of a deeper correction. However, Hayes contends that these moves signal a turning point. He highlighted the end of Fed QT on December 1 and increased U.S. bank lending as catalysts for improved liquidity, suggesting $80,000 is a critical support level. While acknowledging a potential short-term dip into the low $80,000s, he expects Bitcoin to stabilize and rally once liquidity pressures ease.

Hayes also dissected the role of ETF dynamics, noting that leveraged "basis trade" strategies-where institutions use ETF holdings as collateral for short positions-have unwound, reducing downward pressure on BTC. With the Fed's December rate cut odds at 87% and QT cessation, he anticipates a liquidity upswing that could propel Bitcoin to its all-time high of $126,220 and beyond. "If I'm wrong, it doesn't matter - I'm long, I'm still happy either way," he remarked.

The crypto landscape is also shifting as investors rotate into infrastructure plays. Hayes highlighted Bitcoin Layer 2s, DeFi rails, and on-chain leverage exchanges as prime beneficiaries of post-ETF capital reallocation. Projects like Bitcoin Hyper ($HYPER), Best Wallet Token ($BEST), and Hyperliquid ($HYPE) are gaining traction, with presale data and volume metrics underscoring growing demand for scalable solutions.

While Bitcoin's Sharpe Ratio nears zero and institutional flows remain mixed, historical patterns suggest late-cycle capitulation often precedes rebounds. Whale accumulation and derivatives positioning indicate asymmetry favoring a rebound into early 2026, provided macro conditions stabilize. Hayes' confidence hinges on three variables: Fed policy, ETF inflow normalization, and $84,000 support holding.

As the year closes, the debate over Bitcoin's trajectory intensifies. Hayes' liquidity-driven thesis challenges traditional narratives, positioning BTC as a strategic asset amid evolving macro dynamics and institutional adoption.