BitMEX co-founder Arthur Hayes has predicted that Bitcoin (CRYPTO: BTC) could reach $250,000 by the end of 2025.
He cites the Federal Reserve’s pivot toward purchasing more US Treasury bonds and a broader return to fiscal dominance as primary catalysts for a new Bitcoin bull cycle.
What Happened: In a new blog post, Hayes argues that the Federal Reserve has effectively subordinated its independence to the funding needs of the US Treasury, signaling a significant policy shift that favors debt financing over strict inflation control.
He refers to this as a renewed era of fiscal dominance, where the central bank’s role becomes one of accommodating government spending at affordable borrowing costs.
“Powell proved last week that fiscal dominance is alive and well,” Hayes wrote. “QT, at least regarding treasuries, will stop in the short to medium term.”
At the center of Hayes’ thesis is the Fed’s decision at its March meeting to slow the pace of balance sheet reduction.
This move, he explains, allows the Fed to phase out its holdings of mortgage-backed securities while simultaneously resuming purchases of US Treasury bonds.
Though the total balance sheet may remain unchanged, this shift essentially marks a return to Treasury-based quantitative easing.
“Powell stated that while the Fed may maintain mortgage back security runoff, it will net buy treasuries,” Hayes noted. “Mathematically, that keeps the Fed balance sheet constant; however, that is Treasury QE.”
Hayes estimates that this policy adjustment will introduce between $240 billion and $420 billion in annualized liquidity to the market.
In addition, Treasury Secretary Scott Bessent has floated the idea of exempting banks from the supplementary leverage ratio requirement, which would allow banks to purchase treasuries using more leverage, thereby injecting further capital into the system.
Also Read: Bitcoin Is In A Mini Bear Market, Says 10x Research
Why It Matters: Hayes argues that these liquidity injections will disproportionately benefit Bitcoin.
He draws a parallel to the 2008 financial crisis, when gold rose sharply following the Fed’s introduction of quantitative easing, while equities took longer to recover.
He expects Bitcoin to follow gold’s playbook from that era, outperforming traditional assets due to its decentralized nature and sensitivity to fiat money supply increases.
“Bitcoin trades solely based on the market expectation for the future supply of fiat,” Hayes wrote. “If my analysis of the Fed’s major pivot…is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end.”
Hayes also downplays the inflationary risks from tariffs proposed by the Trump administration, citing recent comments from Powell that any resulting price pressures would likely be short-lived.
This, Hayes says, gives the Fed further justification to maintain an accommodative stance even if inflation temporarily ticks up.
Hayes further said his investment firm Maelstrom has been buying Bitcoin in the $76,500 to $90,000 range and will continue to deploy capital cautiously as the market responds to these macroeconomic shifts.
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