Bitcoin's Future Hinged on Fed Policy, Not Halving Cycles

Arthur Hayes, co-founder of the now-defunct crypto derivatives exchange BitMEX, has reiterated his bullish stance on Bitcoin, forecasting significant gains fueled by U.S. Federal Reserve monetary policy rather than traditional halving cycles. In a recent statement, Hayes argued that central bank liquidity injections, particularly from the Fed, will drive renewed buying interest in Bitcoin, pushing the asset beyond existing price resistance levels. He dismissed recent dips below $100,000 as temporary corrections, emphasizing that Bitcoin’s role as a hedge against a weakening dollar will strengthen as liquidity expands. “The market’s momentum is shaped by liquidity conditions—how much money is circulating and being pumped into the system,” Hayes said.

Hayes’ confidence in Bitcoin’s trajectory is complemented by his on-chain activity in other digital assets, including ENA, a token associated with the Ethena protocol. According to on-chain data from @lookonchain, Hayes spent 1.02 million USDC to acquire 1.34 million ENA tokens within an 8-hour window ending on September 9, 2025. This acquisition raised his total holdings to 4.45 million ENA, valued at approximately $3.48 million at the time of the transaction. The move has been interpreted by some market observers as a sign of institutional-level confidence in ENA, particularly as Ethena’s stablecoin, USDe, continues to grow in market capitalization and adoption.

USDe, which is backed by a unique hedging mechanism involving spot and perpetual contracts, has surged to a market cap of $12.5 billion, surpassing USDC and USDT to become the third-largest dollar-pegged stablecoin. Arthur Hayes’ endorsement has played a pivotal role in the token’s rapid ascent, with its non-bank design and high yield structure appealing to investors seeking alternatives to regulated stablecoins. The protocol has also introduced sUSDe, a staking derivative that offers an annualized yield of over 9%, significantly outpacing traditional stablecoins like USDC.

Hayes has also drawn attention to broader market dynamics, including the potential for Ethereum (ETH) to reach $20,000 by the end of 2025 if macroeconomic conditions align with expectations of continued liquidity expansion. This forecast positions ETH as a key beneficiary of institutional flows, particularly as spot ETFs accumulate over 6 million ETH and major institutional players like BlackRock and BitMine continue to build positions. At the same time, he has acknowledged the emergence of other high-growth tokens such as Solana (SOL) and Little Pepe (LILPEPE), which are capturing market share through a combination of institutional adoption and retail-driven momentum.

Despite his optimism, Hayes’ forecasts carry inherent uncertainty and are based on current liquidity assumptions and central bank behavior. The crypto market remains volatile, with factors such as regulatory developments, funding rate shifts, and liquidity crunches in decentralized finance ecosystems posing potential risks. As USDe’s model relies heavily on perpetual funding rates and centralized exchange hedging, its stability under extreme market conditions remains untested, despite having maintained its peg since its launch in 2023.