BitMEX Co-Founder Predicts Bitcoin Pullback to $90,000 Ahead of Fed-Backed Stablecoin Launch

Arthur Hayes, the co-founder of BitMEX, has predicted that Bitcoin could experience a pullback to $90,000 before a significant rally is triggered by the introduction of Fed-backed stablecoins. In a recent blog post, Hayes outlined a scenario where central bank policies and Wall Street incentives converge to push trillions of dollars into digital assets.

Hayes argues that the market has not yet fully priced in the potential impact of fully regulated, dollar-backed stablecoins issued by major banks. These stablecoins, he suggests, will not only rival existing players like Tether or Circle’s USDC but will also become essential tools for absorbing bank reserves and retail deposits currently stuck in low-yield accounts.

According to Hayes, the launch of such stablecoins would effectively function as a new form of liquidity injection, similar to quantitative easing, without requiring formal action from the Federal Reserve. By enabling banks to funnel retail money into short-term Treasury bills without triggering capital rule penalties, these tokens could unlock a new wave of liquidity for risk assets like Bitcoin and tech stocks.

However, before this liquidity injection occurs, Hayes predicts a period of volatility. He cites historical cycles and market sentiment, suggesting that Bitcoin may fall to $90,000 as speculators take profits and traders await clearer signals from the Federal Reserve. Despite this short-term dip, Hayes remains bullish over the longer term, noting that once Wall Street moves in with tokenized dollars, capital flows will accelerate.

Hayes' forecast comes as stablecoins return to the spotlight, with US lawmakers advancing bipartisan proposals that could give federal approval to banks issuing tokenized dollars. The GENIUS Act, recently passed by the US Senate, represents the most comprehensive crypto legislation to date and marks the Senate’s first move toward a dedicated regulatory framework for stablecoins.

Hayes believes that this regulatory direction gives legacy banks a strategic edge. With massive retail networks, regulatory compliance structures, and direct access to the Federal Reserve, these banks are well-positioned to profit from turning deposits into short-term Treasuries through stablecoin issuance. Hayes estimates that if banks shift even a portion of their $17 trillion in deposits into stablecoin products, it could create $6.8 trillion in new demand for US government debt. Combined with changes in how the Fed pays interest on reserves, this shift could flood markets with fresh liquidity, fueling asset inflation across crypto and equities.

Until the introduction of these stablecoins, Hayes sees the coming dip as a buying opportunity. He believes that once USD-backed stablecoins from major banks enter the market, they will unlock a wave of liquidity that could send Bitcoin and other risk assets sharply higher. In his view, the arrival of these tokens will mark the start of a new phase in the market cycle.