Arthur Hayes sees BTC rebounding on wartime inflation, targets $125K

BitMEX co-founder Arthur Hayes predicted a strong rebound for Bitcoin at the Bitcoin 2026 conference. He analyzed that Bitcoin's recent decline from its peak was due to job losses among knowledge workers from the spread of AI technology and a subsequent credit contraction. However, he diagnosed that since the outbreak of the U.S.-Iran war in February, the market's focus has shifted from an AI-driven recession to wartime inflation, allowing Bitcoin to start outperforming the Nasdaq again. Hayes dismissed hawkish concerns about Fed Chair nominee Washi. He argued that the Fed's tightening has a minimal impact on actual liquidity, whereas the easing of bank regulations (eSLR) implemented in April would create about $1.3 trillion in lending capacity. This massive injection of funds, coupled with wartime defense demand, will offset the economic downturn caused by AI, he analyzed. Stating that the liquidity bottom has been confirmed, Hayes presented a price target of $125,000 for Bitcoin.