Bitcoin’s Triumphant Groove to Return in 2026 Despite Gold and Nasdaq Dominance, Predicts Arthur Hayes

In a bold forecast cutting through current market narratives, BitMEX co-founder Arthur Hayes predicts Bitcoin will reclaim its dominant “groove” by 2026, despite being overshadowed by gold and tech stocks throughout 2025. Hayes’s analysis, published on Wednesday, hinges on a pivotal shift in US dollar liquidity, positioning the coming year as a potential inflection point for the flagship cryptocurrency. This perspective arrives as investors globally assess asset performance, with Bitcoin declining 14.40% last year while gold soared 44.40% and the S&P 500’s tech sector delivered a 24.6% return.

Bitcoin’s Groove Hinges on Dollar Liquidity Expansion

Arthur Hayes frames Bitcoin’s value proposition squarely within the context of global monetary conditions. Consequently, he argues that for Bitcoin to regain momentum and achieve new all-time highs, the underlying environment of US dollar liquidity must expand. “If gold and the Nasdaq have the juice, how is Bitcoin going to get its groove back? Dollar liquidity must expand for that to happen,” Hayes stated. He explicitly forecasts this expansion will materialize in 2026, driven by specific macroeconomic and political catalysts.

Hayes identifies three primary drivers for a “drastic increase” in dollar liquidity. First, he points to the potential expansion of the US Federal Reserve’s balance sheet through renewed monetary stimulus, often colloquially termed “money printing.” Second, he anticipates falling mortgage rates as financial conditions loosen. Finally, Hayes predicts commercial banks will increase lending, particularly to US government-backed strategic industries like defense and artificial intelligence.

The 2025 Performance Divergence and Liquidity Story

The year 2025 presented a stark contrast in asset performance, creating a puzzle for many cryptocurrency investors. According to data from Curvo, Bitcoin (BTC) declined by 14.40% over the year. Meanwhile, gold delivered a staggering 44.40% return, and technology stocks led the S&P 500 with a total return of 24.6%, significantly outperforming the index’s overall 18% gain. Hayes interprets this divergence not as a failure of Bitcoin’s thesis but as a direct consequence of liquidity flows.

“The liquidity didn’t support our crypto portfolios,” Hayes acknowledged. “But let’s not draw the wrong conclusions from Bitcoin’s 2025 underperformance. It was, as it always is, a liquidity story.” He explained that while overall dollar liquidity contracted in 2025, negatively impacting Bitcoin, the Nasdaq remained resilient. This resilience, he argues, stemmed from the “nationalization” of artificial intelligence by both China and America, where government directives and investment flooded capital into AI sectors irrespective of traditional market signals.

Geopolitical and Fiscal Catalysts for 2026

Hayes delves deeper into the geopolitical rationale behind his 2026 liquidity forecast. He suggests sustained US military engagement will necessitate massive financing. “The US will continue to flex its military muscle, and to do so requires the production of weapons of mass destruction financed by the commercial banking system,” Hayes said. This defense spending, coupled with strategic industrial policy, would compel the government and banking sector to inject substantial liquidity into the economy.

Furthermore, Hayes highlights the role of executive policy in distorting free market capital allocation. He references actions by the US administration to blunt free market signals, ensuring capital floods into AI and related technologies. This government-directed investment creates pockets of strength in specific equity sectors even during broader liquidity tightening, explaining the Nasdaq’s 2025 outperformance despite conditions that typically hurt risk assets like Bitcoin.

Bitcoin as Monetary Technology in a Debasement Era

Central to Hayes’s argument is his foundational view of Bitcoin’s inherent value. He describes Bitcoin not merely as a digital asset but as “monetary technology” whose primary value proposition is as a hedge against fiat currency debasement. “This alone guarantees that Bitcoin’s value is greater than zero,” Hayes noted. “But for Bitcoin to be worth close to 100,000 United States of American Dollars requires continuous fiat monetary debasement.”

This framework directly links Bitcoin’s price trajectory to the expansion of fiat money supplies. When central banks engage in aggressive monetary expansion, investors historically seek assets perceived as stores of value to protect against inflationary devaluation. Historically, this role belonged to gold; however, Bitcoin has increasingly been viewed as a digital, programmable alternative for the modern era. Therefore, Hayes’s prediction for 2026 is essentially a forecast for a renewed cycle of significant monetary expansion.

Market Context and Historical Precedents

Hayes’s analysis fits into a broader historical pattern observed in cryptocurrency markets. Periods of quantitative easing and low interest rates following the 2008 financial crisis and during the COVID-19 pandemic saw massive capital inflows into Bitcoin and other digital assets. Conversely, tightening cycles, like the one experienced in parts of 2025, often correlate with consolidation or drawdowns. The current prediction assumes a policy pivot back towards accommodation.

Several independent analysts monitor similar liquidity indicators, such as:

• The Fed’s Balance Sheet: Direct injections of liquidity into the financial system.
• Reverse Repo Facility Usage: Signals on banking sector liquidity.
• Global Dollar Index (DXY): Strength of the US dollar relative to other fiat currencies.

Recent price action shows Bitcoin up approximately 12.20% over the past 30 days, suggesting some traders may be positioning for a changing macro environment. However, Hayes cautions that the primary catalyst he envisions is slated for 2026, implying potential volatility until those conditions manifest.

Conclusion

Arthur Hayes provides a clear, liquidity-focused roadmap for Bitcoin’s potential resurgence. He argues that despite its 2025 underperformance against gold and the Nasdaq, Bitcoin’s fundamental value proposition remains intact. The key to Bitcoin reclaiming its groove lies in the anticipated expansion of US dollar liquidity in 2026, driven by geopolitical spending, monetary policy shifts, and strategic bank lending. While the immediate spotlight remains on traditional safe havens and government-backed tech, Hayes’s forecast suggests a significant recalibration may be on the horizon, positioning Bitcoin for a triumphant return as the premier hedge against fiat debasement in the digital age.

FAQs

Q1: What does Arthur Hayes mean by Bitcoin getting its “groove” back?
Hayes uses “groove” to describe Bitcoin returning to a state of strong outperformance and investor favor, characterized by significant price appreciation and market leadership, similar to periods seen in previous bull markets.

Q2: Why did Bitcoin underperform in 2025 according to Hayes?
Hayes attributes the underperformance primarily to a contraction in US dollar liquidity during 2025. Bitcoin, as a liquidity-sensitive asset, struggled in this environment, while sectors like AI tech stocks were propped up by direct government investment and policy.

Q3: What are the specific catalysts for dollar liquidity expansion in 2026?
Hayes points to three main catalysts: 1) Expansion of the Federal Reserve’s balance sheet (new stimulus), 2) Falling mortgage rates due to looser financial conditions, and 3) Increased bank lending to government-backed industries like defense and strategic technology.

Q4: How does gold’s strong performance relate to Bitcoin’s future?
Gold’s 2025 surge reflects a classic flight to safety during uncertainty. Hayes believes that when dollar liquidity expands, the resulting search for inflation hedges will benefit both assets, but Bitcoin’s technological attributes could allow it to capture a disproportionate share of new capital.

Q5: Is Hayes’s prediction guaranteed to happen?
No. Hayes’s forecast is an analysis based on expected macroeconomic and policy shifts. It is a prediction, not a guarantee. Market outcomes depend on numerous unpredictable factors, including actual Fed policy, global economic conditions, and unforeseen geopolitical events.