Arthur Hayes has presented a scenario where Bitcoin could experience renewed upside momentum in 2026 despite mixed market signals.
His view is based on global monetary actions, currency movements and central bank behavior rather than on current price trends.
Fed Balance Sheet Expansion and Currency Dynamics
Arthur Hayes linked his view to a possible intervention by the US Federal Reserve in the currency markets.
He was referring to reports that the New York Fed was monitoring dollar-yen levels to support the Japanese currency.
He said: “Very bullish if true for BTC,” while explaining the mechanisms behind such actions.
Very boolish if true $BTC. This assumes the Fed prints $ and creates bank reserves. $’s are then sold to buy yen. If the Fed manipulates the yen, we will see b/s grow through the Foreign Currency Assets line item, which appears weekly in the H.4.1 release. pic.twitter.com/MrmWfGG1NR
— Arthur Hayes (@CryptoHayes) January 23, 2026
According to Hayes, if the Fed sells dollars to buy the yen, it would create additional bank reserves.
These reserves would expand the Fed’s balance sheet through foreign currency assets. He notes that these changes will be reported weekly in the H.4.1 release.
Hayes argued that balance sheet expansion often supports risky assets. Bitcoin has historically responded to the surge global liquidity.
However, so far no official intervention has been confirmed by the US Treasury Department.
Strength of the yen and Bank of Japan policy
The Japanese yen recently rose to its strongest level in months. Bloomberg reported an increase of about 1.75 percent, to almost 155.63 per dollar.
This followed speculation about policy measures taken by the Japanese authorities.
The Bank of Japan left interest rates unchanged last week. This decision came after market rumors suggested a possible rate hike.
The move helped calm markets fearful of sudden volatility.
Previous predictions linked the yen’s strength to a potential drop in Bitcoin towards $70,000.
Hayes rejected this view and suggested the opposite outcome if US policy actions supported yen stability through liquidity creation.
Related literature: Arthur Hayes Says Dollar Liquidity Stuck Bitcoin in 2025, Sees Better Setup in 2026
Market betting and institutional fund flows
While Hayes outlined a bullish framework, traders have positioned themselves for a near-term downtrend.
Data from Polymarkt shows that many participants expect Bitcoin to fall towards $80,000 before any recovery. This reflects caution rather than confirmation of a rally.
Institutional activities have also shown restraint. Bitcoin exchange-traded funds recorded net outflows of $104 million in one day.
This was the fifth consecutive day of outflows for these products.
More than $1.4 billion has disappeared from the stock market in the past week Bitcoin ETFs, according to SoSoValue.
This followed a strong previous week, when inflows reached their highest level since October. This shift shows changing sentiment amid macro uncertainty.
Arthur Hayes continues to focus on global liquidity trends rather than short-term price action.
Its outlook for 2026 remains tied to central bank behavior and currency market responses. Market participants remain divided and current data reflects caution alongside selective optimism.
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