Arthur Hayes, the former CEO of BitMEX, has provided an updated and bold outlook for Bitcoin’s future price movements. His prediction suggests that Bitcoin will first experience a sharp decline to the $70,000–$75,000 range before ultimately rebounding to a new all-time high of $250,000 by the end of 2025.

Hayes’ short-term bearish prediction, however, isn’t entirely due to recent market events like the DeepSeek-related turmoil. Instead, it stems from his analysis of macroeconomic conditions that he believes will pressure Bitcoin in the near term. In his detailed blog post, Hayes elaborated on how tightening global liquidity, coupled with rising U.S. Treasury yields and the Federal Reserve’s monetary policy, would set the stage for Bitcoin’s price pullback.

A major factor behind Hayes’ revised outlook is the current state of global monetary policy. He argues that the U.S. Federal Reserve’s tighter policies, which involve raising interest rates and slowing down money printing, are creating a strain on financial markets. As liquidity continues to contract, assets priced in fiat currencies, including Bitcoin, are increasingly feeling the effects. Hayes claims that this environment of limited liquidity could lead to a temporary correction in Bitcoin’s price, sending it as low as $70,000–$75,000 before any significant recovery.

In his view, these conditions are not uncommon during Bitcoin’s bull markets. Hayes points to the fact that corrections of around 30% are often seen following significant price increases, especially after market-moving events such as Bitcoin’s breakout above its March 2024 all-time high, spurred by Donald Trump’s re-election. Hayes has consistently argued that such political developments would lead to a global surge in money printing, which he sees as beneficial for Bitcoin in the long run. His stance is that Bitcoin’s sensitivity to monetary policy and liquidity is a key factor that will eventually drive its price upwards, even if there’s short-term volatility.

Although Hayes initially made his prediction without considering the recent impact of China’s DeepSeek AI, he now believes the event may act as a catalyst to reinforce his outlook. The DeepSeek panic, which contributed to a downturn in the crypto market, did result in a wave of selling, including significant liquidations from major Bitcoin holders like MicroStrategy. Hayes sees this market reaction as part of broader trends that he had already identified, particularly the liquidity stress in global markets. For Hayes, the DeepSeek-related volatility is merely amplifying pre-existing bearish pressures that were already setting the stage for a short-term correction.

Hayes doesn’t just focus on U.S. policy; he also looks at global dynamics. While President Trump’s pro-crypto rhetoric promises to push for favorable regulation, Hayes believes that the Federal Reserve will continue to pursue policies that could work against these aims, particularly when it comes to managing inflation. Hayes fears that political tensions could interfere with the coherent execution of the policies needed to ensure Bitcoin’s sustained growth, leading to further short-term volatility.

Despite these concerns, Hayes is ultimately bullish on Bitcoin’s long-term prospects. His forecast of Bitcoin reaching $250,000 by the end of 2025 hinges on his belief that a financial crisis will force global governments to once again resort to aggressive money printing, providing the liquidity necessary to fuel Bitcoin’s rise. Hayes sees any price drop in the near future as a temporary phase that will ultimately lead to greater gains for long-term investors.

In summary, Hayes predicts that Bitcoin will face a temporary slump, with prices potentially dipping to the $70,000–$75,000 range. However, he remains confident that the market conditions will soon turn in Bitcoin’s favor, driving it to a record high of $250,000 by the end of 2025. While the path to this rebound might be rocky, Hayes’ analysis indicates that the broader economic trends will eventually favor Bitcoin’s growth.