MarketsBitcoinOpinion
|5 min ReadHayes Pivots Bullish: Dollar Liquidity Flood Targets $110k
Tariq Al-Saidi
Senior Analyst
Published
Jan 16, 2026
Arthur Hayes just dropped "Frowny Cloud," a mea culpa on 2025's price action wrapped in a violent bullish pivot for 2026. Using the metaphor of avalanche safety—where a "persistent weak layer" in the snowpack leads to disaster—Hayes analyzes why Bitcoin failed to launch in 2025 while Gold and the Nasdaq soared. The verdict: Bitcoin tracked the contracting dollar liquidity perfectly, while other assets decoupled due to war and state-sponsored speculation. Now, that liquidity layer is stabilizing.
The Sovereign Revolt (Why Gold Pumped)
Gold bugs and the financial establishment took a victory lap in 2025, but Hayes argues they missed the root cause. Gold didn't pump because of standard inflation hedging; it pumped because central banks are revolting against Pax Americana.
Following the US freezing Russian assets in 2022 and recent economic warfare against Venezuela, sovereign nations stopped buying US Treasuries. They are now price-insensitive buyers of physical gold to avoid asset seizure. This structural bid broke the correlation between Gold and CPI.
Crucially, this is not a retail mania. The ratio of GLD shares outstanding to the spot price is plummeting. Retail isn't here yet; this is purely nation-state accumulation.
The data supports this: The US trade deficit contracted in late 2025 not because of productivity, but because the US exported massive amounts of non-monetary gold to Switzerland, which was then refined and shipped to China and India.
The Nationalized AI Bubble (Why Nasdaq Pumped)
The Nasdaq 100 decoupled from Bitcoin and liquidity because the US government effectively nationalized the AI sector. Hayes posits that Trump has adopted a Chinese-style industrial policy: "Winning AI" is now a national security mandate.
Capital is flooding into AI stocks regardless of Return on Equity (ROE) because the state guarantees the bid. This allowed the Nasdaq to ignore the liquidity contraction that crushed crypto. However, Hayes warns this is a dangerous game—manufacturing PMI is already in contraction, proving the "growth" is isolated to the subsidized tech sector.
The 2026 Liquidity Pivot
Hayes identifies three distinct "spigots" that opened in Q1 2026, signaling the return of the fiat flood that Bitcoin needs to survive.
1. Fed Money Printer (RMP)
Quantitative Tightening (QT) died in December 2025. The Fed has switched to "Reserve Management Purchases" (RMP), a euphemism for money printing. This injects a minimum of $40 billion monthly. The Fed balance sheet has bottomed and is turning up.
2. Commercial Credit Expansion
Commercial banks are now creating money ex nihilo by lending to government-backed "strategic industries." Example: JP Morgan's $1.5 trillion facility. This moves credit creation from the central bank to the commercial sector, increasing velocity. Bank loan growth (ODL) is already spiking.
3. The Housing Pump
Trump ordered Fannie Mae and Freddie Mac to deploy $200 billion of inert capital into Mortgage-Backed Securities (MBS). This state-directed bid is designed to crush mortgage rates and create a wealth effect for voters before the midterms.
The Trade: Leverage Without Derivatives
Hayes is betting that Bitcoin will now realign with this expanding liquidity. To capture the upside beta, he is bypassing perps and options in favor of corporate leverage.
MicroStrategy (MSTR) & Metaplanet (3350 JT): Both are trading at the low end of their historical premiums relative to BTC. Hayes views these as coiled springs. If BTC reclaims $110,000, the retail FOMO into these proxies will trigger a massive squeeze.
Zcash (ZEC): Maelstrom continues to accumulate ZEC, citing the developer exodus from ECC as a bullish catalyst for a more commercial, product-focused direction.
The liquidity avalanche is coming, but this time, it's the good kind.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.