Arthur Hayes, the creator of BitMEX and a prominent voice in the crypto community, has released a new piece titled “Frowny Cloud.”
In this article, Hayes explains that Bitcoin’s (BTC) potential underperformance throughout 2025 is largely due to tightening liquidity in US dollars. He highlights that stricter dollar lending policies within the global financial system have dampened investors’ enthusiasm for riskier assets, which directly affects cryptocurrency markets.
Hayes points out that the Federal Reserve’s ongoing restrictive monetary policy, efforts to shrink its balance sheet, and more conservative lending practices among banks will create tougher liquidity conditions in 2025.
Within such an environment, highly volatile and risky assets like Bitcoin become less appealing to investors. According to Hayes, BTC’s subdued price action should be attributed more to macroeconomic forces than technical market factors.
Nevertheless, Hayes offers a brighter outlook for 2026. He anticipates a fresh phase of expansion in US dollar-based credit during this period.
The Fed is expected to grow its balance sheet again while banks may increase their lending activities and mortgage rates could decline. These changes might inject new liquidity into markets and foster favorable conditions for risk assets.
If these predictions come true, cryptocurrencies—especially Bitcoin—along with stocks and other high-risk investments could experience significant upward momentum. Hayes emphasizes that without improved macro-level liquidity conditions, sustaining a bullish trend in crypto remains challenging.
This content does not constitute investment advice.
Arthur Hayes, the creator of BitMEX and a prominent voice in the crypto community, has released a new piece titled “Frowny Cloud.”
In this article, Hayes explains that Bitcoin’s (BTC) potential underperformance throughout 2025 is largely due to tightening liquidity in US dollars. He highlights that stricter dollar lending policies within the global financial system have dampened investors’ enthusiasm for riskier assets, which directly affects cryptocurrency markets.
Hayes points out that the Federal Reserve’s ongoing restrictive monetary policy, efforts to shrink its balance sheet, and more conservative lending practices among banks will create tougher liquidity conditions in 2025.
Within such an environment, highly volatile and risky assets like Bitcoin become less appealing to investors. According to Hayes, BTC’s subdued price action should be attributed more to macroeconomic forces than technical market factors.
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This content does not constitute investment advice.