Arthur Hayes: Credit Expansion Will Push Bitcoin to $250K, Ether to $10K

Former BitMEX CEO Arthur Hayes published an essay predicting bitcoin will reach $250,000 and ether will hit $10,000 by the end of 2025. Hayes bases these forecasts on expected credit expansion and stablecoin growth. Hayes attributes the expected price surge to what he calls credit-fueled inflation and wartime economic policies.

Credit Expansion Drives Crypto Prices

In his essay “Time Signature,” Hayes argues that government credit creation drives crypto prices. He compares market timing to music, saying investors must follow the “kick drum” of credit expansion to trade successfully. Hayes claims the fiat money supply expansion since 2009 explains Bitcoin’s price gains and will continue pushing prices higher.

Hayes created the “.BANKUS U Index,” which tracks Federal Reserve reserves and banking system liabilities. According to his data, this index doubled since January 2020 while Bitcoin’s price increased fifteen-fold. He uses this correlation to support his year-end price targets.

The former exchange CEO describes current U.S. fiscal policy as resembling wartime economics. He says procurement guarantees for critical industries encourage banks to extend credit freely, creating an inflationary cycle where crypto serves as a hedge.

Stablecoins Fund Government Debt

The essay focuses heavily on stablecoins as drivers of crypto growth. Hayes estimates that 9% of any crypto market cap increase flows into stablecoins, which then buy short-term U.S. Treasury bills. He calls stablecoins the new version of World War II war bonds, quietly funding government debt.

Hayes projects the crypto market cap could reach $100 trillion by 2028, with $9 trillion flowing into stablecoins that would purchase $9 trillion in Treasury bills. He points to policy changes like allowing 401(k) plans to hold crypto – a $8.7 trillion market – and proposed capital gains tax eliminations as factors that could accelerate growth.

Hayes argues that banks will expand credit to finance government spending on industrial policy, which will increase fiat money supply and drive crypto prices higher. He suggests this pattern will continue through 2025, supporting his Bitcoin and Ether price predictions.