BitMEX co-founder Arthur Hayes argues Bitcoin has already hit its cycle bottom at $60,000 and is set for an “inevitable” rally to $126,000, according to his May 11 essay, “The Butterfly Touch.” He contends the rally will be fueled by a massive expansion of fiat liquidity driven by the US-China artificial intelligence arms race and rising global military expenditures.
“Bitcoin bottomed earlier this year at $60,000, and with a tailwind of trillions of dollars and yuan yet to be created at its back, retaking the $126,000 is a foregone conclusion,” Hayes wrote.
Hayes’s thesis connects several macroeconomic forces he believes will compel central banks to expand the money supply. He points to the escalating US-Iran conflict, which began February 28, as the start of the current bull market, noting Bitcoin has since outperformed gold and major US tech indexes. This, combined with the national security imperative for both the US and China to dominate in AI, creates political cover for unchecked credit creation that he expects will flow into hard assets like Bitcoin.
The investor is now watching the $90,000 level as a key technical trigger, arguing that a break above it would force call option writers to cover their positions, turning a strong rally into an explosive one. His family office, Maelstrom, is reportedly moving to “maximum portfolio risk” in response, with large holdings in Hyperliquid (HYPE) and Zcash (ZEC).
Hayes frames the AI buildout as a national security issue for both Washington and Beijing, removing any political ceiling on funding the necessary infrastructure through credit. He cites two economic concepts that create a self-reinforcing loop of spending: Jevons’ Paradox, where falling costs of intelligence increase demand for computation exponentially, and the Red Queen Effect, where companies are forced into ever-larger spending cycles to keep pace with rivals. While US tech firms have so far used operating cash flow, Hayes notes the scale now requires commercial bank lending, while China has already directed its banks to pivot from real estate to technology.
This conviction extends to his personal investment strategy. After establishing large positions in HYPE and ZEC, Hayes announced his fund’s next major target is NEAR Protocol. He teased a forthcoming essay that will detail his thesis on NEAR, connecting it to a privacy narrative and a cash-flow-positive feature called “Near intents” that he believes will reverse the token’s price history.
Despite his bold predictions, some critics note that Hayes's shorter-term price targets have previously missed the mark on timing. However, his core long-term thesis that fiat expansion benefits scarce digital assets has remained consistent. For now, Hayes is advising investors to act on the bull market, seeing any potential slowdown before the US November midterm elections as a temporary headwind, not a reason to reduce exposure.
This article is for informational purposes only and does not constitute investment advice.