In a recent analysis titled Quid Pro Stablecoin, former BitMEX CEO Arthur Hayes delivers a compelling outlook on the current state of the crypto market and its potential trajectory through 2025. Known for his macro-driven investment philosophy, Hayes warns that Bitcoin may temporarily dip to $90,000 before resuming its upward momentum in the next bull phase. His forecast hinges on evolving monetary policy, liquidity dynamics, and a pivotal shift in how traditional finance interacts with digital assets.
Why a Short-Term Bitcoin Correction Could Be Inevitable
Arthur Hayes anticipates a period of consolidation—or even a slight downturn—in the crypto markets leading up to the Jackson Hole Economic Symposium in late August. This event, where Federal Reserve officials often signal future monetary policy shifts, could act as a catalyst for renewed market movement.
One of the primary concerns Hayes highlights is the potential replenishment of the U.S. Treasury General Account (TGA). When the Treasury increases its balance by issuing debt and pulling cash from the financial system, it effectively removes liquidity—a move historically bearish for risk assets like cryptocurrencies.
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With Bitcoin recently trading near $107,000 as of early July 2025, profit-taking is likely among short-term traders. Combined with tightening liquidity, this could pressure prices downward, possibly testing the **$90,000 support level**. While such a move might spook retail investors, Hayes views it as a healthy "shakeout" that clears weak hands before the next surge.
He notes that his fund, Maelstrom, has already reduced exposure to illiquid altcoins and remains cautiously positioned—ready to re-enter aggressively if macro conditions improve.
The Rise of Bank-Issued Stablecoins: A New Era for Crypto
What sets this market cycle apart, according to Hayes, is the increasing involvement of traditional banking institutions in the crypto ecosystem. Unlike previous bull runs driven largely by retail speculation and decentralized innovation, the next phase may be fueled by institutional capital—and particularly by regulated stablecoins issued by major banks.
Recent legislative developments support this view. The U.S. Senate passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), establishing a federal framework for regulating payment stablecoins. This law paves the way for banks like JPMorgan to launch their own USD-backed digital tokens, fully compliant with regulatory standards and integrated into the Federal Reserve’s payment infrastructure.
These bank-issued stablecoins differ significantly from existing options like USDC or USDT. They would operate under strict reserve requirements, regular audits, and direct oversight—making them far more trustworthy and scalable for mainstream adoption.
How Regulated Stablecoins Could Transform Market Liquidity
Hayes describes this evolution as a "game-changer" for crypto liquidity. By issuing regulated stablecoins, banks can legally deploy customer deposits into short-term U.S. Treasury securities—earning yield without violating capital adequacy rules. This mechanism mirrors a form of stealth quantitative easing, injecting fresh capital into financial markets without explicit central bank intervention.
Here’s how it works:
- Customers deposit money into a bank.
- The bank mints a 1:1 USD-backed stablecoin.
- That stablecoin is backed by short-term Treasuries held on the bank’s balance sheet.
- The stablecoin circulates in crypto markets, providing liquidity.
This process effectively transforms trillions in dormant bank deposits into active yield-generating assets—many of which could flow into digital asset ecosystems.
Could $6.8 Trillion in New Liquidity Fuel the Next Bull Market?
Hayes projects that if just 40% of the $17 trillion** currently held in U.S. bank deposits were channeled through regulated stablecoins, it could generate **$6.8 trillion in demand for U.S. Treasuries. That influx wouldn’t remain confined to bond markets—it would ripple across financial assets, including Bitcoin, tech stocks, and decentralized finance (DeFi) platforms.
Such a liquidity wave could dwarf previous cycles driven by Fed stimulus or retail inflows. Crucially, it wouldn’t rely on government deficit spending or central bank balance sheet expansion—it would emerge organically from within the banking system itself.
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This structural shift suggests that when macro conditions stabilize post-Jackson Hole, the stage could be set for a powerful resurgence in crypto prices—potentially pushing Bitcoin toward six-figure gains once again.
Frequently Asked Questions
Could Bitcoin really drop to $90K before rising again?
Yes, according to Arthur Hayes’ analysis. A temporary dip to $90,000 is plausible due to Treasury-driven liquidity withdrawal and market consolidation ahead of key Federal Reserve events. Such corrections are common before major rallies.
What makes bank-issued stablecoins different from existing ones?
Bank-issued stablecoins will have full regulatory backing, direct access to Federal Reserve systems, and must comply with stringent reserve and licensing rules. This makes them more secure and scalable than current privately issued stablecoins.
How does the GENIUS Act impact the crypto market?
The GENIUS Act provides a clear federal framework for stablecoin regulation, encouraging innovation while ensuring consumer protection. It favors bank-led issuance, accelerating institutional adoption of blockchain-based payments.
Is Hayes bullish or bearish on Bitcoin long-term?
Despite his near-term caution, Hayes remains strongly bullish long-term. He has previously forecasted Bitcoin reaching $1 million by 2028, driven by global monetary debasement and institutional-grade crypto infrastructure.
What should investors do during a summer lull?
Investors should use periods of low volatility to accumulate quality assets at favorable prices. Monitoring macroeconomic indicators—especially TGA balances and Fed rhetoric—can help time re-entry points ahead of the next bull leg.
How might regulated stablecoins affect DeFi and Web3?
They could bring unprecedented liquidity to decentralized protocols, enabling seamless integration between traditional finance and DeFi. This convergence may drive innovation in lending, trading, and cross-border payments.
Final Thoughts: Navigating Volatility With Macro Clarity
Arthur Hayes’ latest outlook underscores a critical truth: crypto markets are no longer isolated from global finance. They are deeply intertwined with central banking policies, fiscal decisions, and regulatory evolution. Understanding these macro forces is essential for navigating short-term volatility and capturing long-term gains.
While a dip toward $90,000 may test investor resolve, it could also present a strategic opportunity. As traditional banks embrace blockchain technology and regulated stablecoins begin circulating at scale, the foundation for the next major bull run is being laid—not in hype, but in structural transformation.
For those watching closely, the message is clear: patience now could yield significant rewards later. The convergence of banking innovation, regulatory clarity, and organic liquidity growth points to a future where crypto plays a central role in the global financial system.
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