Arthur Hayes expects Bitcoin (BTC) weakness to last until the Federal Reserve or banks start growing their balance sheets. A US dollar liquidity gauge is already up about 4.5% this year.

Hayes, BitMEX co-founder and chief investment officer of family office Maelstrom, posted the call on X. Bitcoin holders therefore face a rising liquidity gauge and a balance sheet condition Hayes ties to the weakness.

Why Is Arthur Hayes Cautious on Bitcoin Despite Rising Liquidity?

The post came with a chart of the .USDLIQ index, a gauge of dollar liquidity.

The index stood at 32.71 million as of November 2, up 4.49% since January. However, it sits about 0.6% below its October peak of 32.90 million.

A balance sheet grows when a central bank or lender buys assets or extends more credit. That adds money to the financial system.

In contrast, his written call was brief.

“USD liquidity is recharging. Expect $BTC weakness until Fed and or Banks start growing their balance sheet.”

Did Hayes Already Step Back From the Market?

Hayes urged traders to go long on Bitcoin and Ethereum (ETH) in an October 15 call. He cited an expected multi-trillion-dollar bailout after the artificial intelligence (AI) data center boom.

Days later, he sold about $22.28 million in crypto from Maelstrom’s directional book, its portfolio of outright price bets. He also confirmed on X that he plans to sit out the market.

Meanwhile, Hayes has tied crypto to Fed money creation before. In September, he argued that a weaker euro against the yen could point to Fed money printing that lifts crypto.

BTC has dipped below $77,000. Source: CoinGecko

Bitcoin has also lagged liquidity-style signals. In September, it trailed a record global money supply of $103.66 trillion.

Hayes’ framing places Bitcoin’s next move with Fed and bank balance sheets rather than liquidity readings. Until those grow, his call stays cautious.

The post Arthur Hayes Says Bitcoin Faces Weakness Until Fed or Banks Expand Balance Sheets appeared first on BeInCrypto.