Arthur Hayes Suggests Possible 30% BTC Correction Linked to Rising Treasury Yields and Inflation Concerns

• Arthur Hayes, co-founder of BitMEX, predicts a potential 30% correction for Bitcoin (BTC), anticipating a price drop to between $70,000 and $75,000.

• This forecast is primarily influenced by rising U.S. Treasury yields and persistent inflation, impacting the broader crypto market.

• According to Hayes, “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 girding higher with no material pullback.” – COINOTAG Source.

Arthur Hayes predicts a Bitcoin price correction to $70K-$75K amid rising Treasury yields, prior to a potential surge to $250K by year-end.

Market Implications of Hayes’ BTC Correction Forecast

Arthur Hayes’ projection of a **30% correction** in Bitcoin (BTC) brings a spotlight on the broader **cryptocurrency landscape**. As U.S. Treasury yields climb, there is a growing sentiment that such movements translate into stricter liquidity conditions in the market. Historically, **higher Treasury yields** tend to divert investments away from riskier assets like stocks and cryptocurrencies, making the latter less appealing in comparison. This, in effect, poses a potential downside risk for Bitcoin’s price trajectory.

The Link Between Treasury Yields and Bitcoin Prices

Rising **10-year Treasury yields** have historically indicated a dip in liquidity, which can negatively affect investors’ risk appetite. Hayes elaborates, “Inflation is still elevated and likely to go higher in the near future as the world decouples economically. This is why I expect 10-year yields to rise… Stocks will dump.” This analysis underscores the close correlation between U.S. equities and Bitcoin, with a Pearson correlation coefficient reaching **0.70**, indicating strong co-movement during volatile periods. Such correlations highlight the fragility of BTC in relation to broader market movements.

Source: The Block

Future Outlook: The Rise of Quantitative Easing

Hayes also warns that in the event of **liquidity squeezes**, Bitcoin may experience a sharper decline compared to stocks, serving as an early indicator of financial distress. He noted that monetary responses from countries like the U.S., China, and Japan through quantitative easing (QE) could dramatically alter market dynamics. Hayes assigns a **60% chance** of a potential QE pivot occurring in Q1 or Q2, which, if realized, may act as a significant catalyst for Bitcoin’s recovery and growth.

“A mini financial crisis in the US would provide the monetary mana crypto craves. It would also be politically expedient for Trump,” Hayes added, emphasizing the potential political implications of economic instability.

Evaluating BTC’s Current Market Conditions

Despite the potential for a price correction, Hayes remains optimistic about Bitcoin’s longer-term trajectory. He highlights that the current state of Bitcoin’s **’Everything Indicator’**, which assesses miner profitability, money supply, and network growth, suggests that the asset is still in a bullish phase—currently reading above **50**, indicating a sustained growth potential. Historically, values above **80** have marked cycle tops in earlier years (2017 and 2021), suggesting that there is still considerable room for further price appreciation.

Source: BM Pro

Conclusion

Arthur Hayes’ prediction of a 30% correction in Bitcoin highlights significant macroeconomic factors that could shape the cryptocurrency’s short-term performance. As liquidity constraints intensify, and with potential monetary policy shifts on the horizon, the market remains on a precarious edge. However, with the **’Everything Indicator’** offering signs of favorable long-term dynamics, investors must remain vigilant, balancing short-term volatility against the potential for significant upside in the coming months.