Bitcoin (CRYPTO: BTC) has likely bottomed at $74,500, according to BitMEX co-founder Arthur Hayes.
What Happened: Hayes, now Chief Investment Officer at Maelstrom, attributes this call to U.S. policy shifts following President Donald Trump's tariff adjustments, which he believes will drive future liquidity and support Bitcoin's price.
In his essay published on Wednesday, Hayes analyzes the impact of Trump's tariff policies on global financial markets, describing the initial tariff announcement on April 2 as a "ski cut" that triggered significant market volatility.
The MOVE Index, a measure of U.S. bond market volatility, spiked to 172, prompting a swift policy pivot.
Within a week, Trump paused tariff implementation for most nations except China for 90 days, while Treasury Secretary Scott Bessent outlined plans for treasury debt buybacks to stabilize markets.
Hayes argues this response marks a turning point for Bitcoin, which dipped to $74,500 during the turmoil.
Hayes predicts that future tariff escalations will lead to increased monetary interventions, such as expanded buybacks, to manage bond market volatility.
He expects these actions to inject dollar liquidity, benefiting Bitcoin as an anti-establishment asset.
Also Read: Bitcoin Taps $94,000: Is $99,000 Next?
Why It Matters: At Maelstrom, Hayes has maximized crypto exposure, heavily accumulating Bitcoin during its recent dip from $110,000 to $74,500.
The blog also draws parallels to Q3 2022, when treasury bill issuance under Janet Yellen added $2.5 trillion in liquidity, fueling a Bitcoin rally.
Hayes anticipates a similar outcome now, with Bessent's buyback strategy supporting government funding needs amid a rising FY25 deficit, which is 22% higher than FY24 through March.
He also foresees Bitcoin surpassing its previous high of $110,000, potentially nearing $200,000, followed by an altcoin rally.
Hayes expects the Federal Reserve to introduce liquidity-boosting measures at its May 6-7 meeting, such as exempting treasury bonds from banks' supplemental leverage ratio or redirecting funds from maturing mortgage-backed securities into new treasury bonds.
These steps, he argues, will further support Bitcoin's upward trajectory by ensuring market stability.
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