Analyst predicts Bitcoin doubling amid Fed's balance sheet expansion

BULLISH

CCY

TDE

BTC

ARTHUR

Cryptocurrency markets could be heading into another liquidity-driven rally, according to BitMEX co-founder Arthur Hayes, who thinks the Federal Reserve is already expanding its balance sheet even as inflation concerns linger.

Bitcoin (BTC) price could reach a very high price by the end of the year, Hayes said during a conversation with Kyle Chasse published on YouTube on Apr. 23.

Fed's balance sheet expansion

The Fed is quietly increasing liquidity by roughly $40 billion a month through reserve management purchases, Hayes noted. He pushed back on the notion that the central bank's dominant policy stance is tightening.

His comments come as debate intensifies around incoming chair. While nominee Kevin Warsh has previously criticized quantitative easing for widening inequality, Hayes argued new leadership is quite likely to continue the practice of balance sheet expansion rather than reverse it.

He also dismissed the idea that the Fed will meaningfully shrink its balance sheet anytime soon, pointing to the lack of consensus around how such a framework would even work.

More News:

Impact of Iran war

Beyond monetary policy, Hayes pointed to geopolitics as another major driver of liquidity. He argued that the war with Iran could fundamentally shift fiscal priorities, with wartime spending taking precedence over inflation concerns.

In that environment, government spending tends to accelerate, often supported by increased fiat printing. War drives demand for resources, and that demand ultimately feeds into monetary expansion, he argued.

Hayes also suggested the U.S. could be moving toward a more state-directed financial system, similar to China, where authorities exert greater influence over how banks allocate credit. That could mean directing lending toward strategic industries such as defense or critical minerals.

Hayes' portfolio distribution

Against that backdrop, Hayes said his portfolio remains heavily exposed to crypto, with roughly 95% allocated to long positions and minimal cash on the sidelines.

Within the space, he highlighted potential opportunities beyond Bitcoin, including assets like Zcash (ZEC) and Hyperliquid (HYPE), which he believes could perform very well in a liquidity-rich environment.

Bullish Bitcoin target

Still, the core thesis centers on Bitcoin itself.

If current trends in monetary expansion and fiscal policy persist, Hayes predicts the leading cryptocurrency could climb to $145,000 by the end of 2026.

Nigeria Stablecoin Summit: Stakeholders champion real-world use cases for explosive adoption