Arthur Hayes, former CEO of BitMEX, predicted in a Jan. 27 blog post that Bitcoin (BTC) is likely to correct to the zone between $70,000 and $75,000 before reaching $250,000 by the end of 2025.
Hayes argued that Bitcoin’s historical volatility makes a 30% correction plausible within this bull market.
A potential pullback to the $70,000 range would likely give back all gains spurred by recent market optimism, including the “Trump Trade” following President Donald Trump’s re-election in 2024.
According to Hayes:
“A pullback of this magnitude would be ugly. I think we are more likely to go down to $70,000 to $75,000 Bitcoin and then rise to $250k by the end of the year than to continue [grinding] higher with no material pullback.”
Hayes added that a steep correction in Bitcoin would likely trigger an even larger selloff in altcoins, creating lucrative opportunities for those positioned to capitalize.
Consequently, a large liquidation of Bitcoin positions could signal when it’s time to find reasonable entry prices in other crypto.
History often rhymes
Hayes began the year optimistic but has since tempered his outlook. Drawing parallels to the market downturn of late 2021, he explained that subtle shifts in central bank balance sheets, credit expansion, and fiat liquidity conditions have left him uneasy.
Although optimistic about continuing the bull cycle in 2025, Hayes sees a potential correction approaching. Much of his analysis focuses on the interplay between global monetary policy and financial markets.
He highlighted concerns about the US Federal Reserve, which, according to Hayes, faces a delicate balancing act as it navigates rising 10-year Treasury yields and political pressures. The record pace of debt issuance and the reluctance of usual buyers — foreign governments and commercial banks — are creating a “powder keg” for the Treasury market.
Additionally, Hayes warned that rising yields could trigger a mini-financial crisis, forcing the Federal Reserve to reverse course with rate cuts and quantitative easing (QE). This potential liquidity injection would ignite a massive rally in risk assets, including Bitcoin, as investors seek refuge from fiat devaluation.
Macro indicators
Hayes also examined monetary policy in China and Japan, noting a slowdown in money creation in both countries.
While the People’s Bank of China (PBOC) launched reflationary measures in late 2024, it abruptly shifted course in January 2025, opting for currency stability over economic stimulus. Similarly, the Bank of Japan (BOJ) has tightened monetary conditions, further constraining global liquidity.
He highlighted that these conditions create a short-term headwind for Bitcoin. Still, he set the stage for a future surge as central banks inevitably turn to money printing to address financial instability.
Additionally, Bitcoin shows a heightened short-term correlation with traditional assets, particularly US tech stocks.
With Nasdaq futures slipping amid concerns over rising yields and new competition from China’s artificial intelligence developments, Hayes warns that Bitcoin could be a leading indicator of financial stress.
“Bitcoin is the only truly global free market in existence. It is extremely sensitive to global fiat liquidity conditions; therefore, if a fiat liquidity crunch is forthcoming, its price will break down before that of stocks and will be the leading indicator of financial stress.”
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