Arthur Hayes, the outspoken co-founder and former CEO of BitMEX, delivered a bullish take on the crypto market outlook at Bitcoin Vegas 2026 on Monday.
Hayes sees room for a strong Bitcoin rally to $125,000 by the end of 2026, driven by powerful macroeconomic catalysts that could spark renewed bullish market momentum.
The Money Supply Expansion And AI Disruption Factor
A key pillar of Hayes’ bullish thesis centers on growing liquidity in the U.S. financial system. He highlighted the Enhanced Supplemental Leverage Ratio, which took effect on April 1, as a significant regulatory shift that allows major banks like JPMorgan Chase and Citigroup to hold lower capital reserves against their assets—potentially unlocking additional lending capacity and boosting overall market liquidity.
Hayes went on to argue that, once standard banking multipliers are factored in, the resulting credit expansion could approach $4 trillion. He believes this wave of liquidity would more than offset the earlier contraction driven by AI-related job displacement, which he described as a hidden form of credit deflation.
According to the Maelstrom CIO, artificial intelligence has effectively become the new “subprime” cycle, displacing workers and weighing on tech sector revenues. He pointed to market behavior following Bitcoin’s October 2025 peak as part of this broader macro backdrop.
 
While tech-heavy indices like the Nasdaq Composite remained relatively stable, Bitcoin fell sharply by about 50%. Hayes argues that this divergence reflects mounting pressure on software and SaaS firms as AI tools begin to disrupt traditional revenue models. Despite this weakness, he believes a projected $4 trillion wave of credit liquidity could ultimately offset the drag and act as a powerful tailwind for Bitcoin’s price in the coming months.
War Spending To Drive BTC Boom
Following the escalation of the U.S.–Iran conflict, defense spending is rising sharply as governments prioritize military readiness. Hayes pointed to projected U.S. defense outlays approaching $1.5 trillion as a key driver of new liquidity entering the financial system, arguing that this surge in spending effectively translates into expanded money creation and asset purchases.
In his view, this environment of increased fiscal expansion and monetary issuance creates conditions where Bitcoin tends to perform strongly.
“We’ve had some chop. We’ve had a war. Now it’s time to break out. That’s why I believe Bitcoin is going higher. I think my end-of-year target is around $125,000.”
Hayes further dismissed concerns that tighter monetary policy under the incoming Federal Reserve leadership would restrict liquidity. Pointing to incoming Fed Chair Kevin Warsh and Treasury Secretary Scott Bessent, he argued that both the Federal Reserve and Treasury will ultimately be forced to maintain strong demand for U.S. debt, which has now surpassed $38 trillion.
BTC was recently trading hands at $76,051 after the psychological barrier of $80,000 was strongly rejected last week.
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