BitMEX co-founder Arthur Hayes has warned that Bitcoin (BTC) could face a sharp short-term decline before any sustained rally, as macroeconomic conditions remain restrictive and global risks build.
Speaking on the Coin Stories podcast, Hayes said he would not allocate fresh capital to Bitcoin at current levels, arguing that the Federal Reserve has yet to inject the liquidity needed to support a broader risk asset rebound.
Hayes expects policy shifts to come eventually, driven by mounting economic pressure. He pointed to tariffs and geopolitical tensions as catalysts that could force governments toward capital controls and monetary easing. In his view, such measures would ultimately flood the system with liquidity and act as a major tailwind for Bitcoin.
Short Term Risks Could Trigger Sell Off
Despite his long-term bullish stance, Hayes cautioned that near-term risks remain elevated. He said an escalation in geopolitical conflicts, particularly involving the U.S. and Iran, could trigger a market-wide sell-off that drags Bitcoin below $60,000 before any recovery begins.
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He also flagged a less discussed threat. Rapid advances in artificial intelligence could lead to job displacement and a deflationary credit contraction, putting pressure on all risk assets including crypto.
Hayes maintained a longer-term price outlook between $250,000 and $750,000 for Bitcoin, but stressed that liquidity conditions need to shift before such moves can materialize.
Analysts Point To Historical Recovery Patterns
Separate research from Latin American exchange Mercado Bitcoin suggests that Bitcoin has historically recovered strongly after initial sell-offs during global shocks.
According to the exchange’s head of research Rony Szuster, Bitcoin often declines in the early stages of crises as investors seek cash, but tends to outperform traditional assets such as gold and equities in the following weeks.
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