Hayes Predicts Bitcoin Weakness Until Balance Sheets Grow
Maelstrom co-founder Arthur Hayes says Bitcoin will stay soft until the Fed or banks expand their balance sheets, and he has begun selling crypto.
Updated on Nov. 3, 2026 in Economic Indicators
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Arthur Hayes, BitMEX co-founder and chief investment officer of family office Maelstrom, posted on X that Bitcoin weakness is expected until the Fed or banks grow their balance sheets. Days after urging traders to go long on Bitcoin and Ethereum in an October 15 call, Hayes sold about $22.28 million in crypto from Maelstrom's directional book and confirmed he plans to sit out the market.
Why it matters
Hayes ties Bitcoin's weakness to the expectation that the Fed and banks have not yet expanded their balance sheets, a liquidity condition he argues drives crypto prices. His reversal from a bullish call to selling and sitting out the market illustrates how sensitive positioning is to shifting liquidity expectations.
The .USDLIQ dollar liquidity index stood at 32.71 million on November 2, up 4.49% since January and about 0.6% below its October peak of 32.90 million. The source does not specify the timing of any future balance sheet expansion that would reverse the expected Bitcoin weakness.
The players
Arthur Hayes
Arthur Hayes is a co-founder of the cryptocurrency exchange BitMEX and serves as chief investment officer of the family office Maelstrom, and he is a prominent commentator on crypto markets and central bank liquidity.
The details
Hayes posted a chart of the .USDLIQ index on X to explain that a balance sheet grows when a central bank or lender buys assets or extends more credit. He had urged traders to go long on Bitcoin and Ethereum on October 15, citing an expected multi-trillion-dollar bailout after the AI data center boom, and had linked a weaker euro against the yen in September to Fed money printing.
Timeline
September: Hayes linked a weaker euro against the yen to Fed money printing, and Bitcoin trailed a record global money supply of $103.66 trillion.
October 15: Hayes urged traders to go long on Bitcoin and Ethereum.
November 2: The .USDLIQ index stood at 32.71 million.
November 3: Hayes posted on X that Bitcoin weakness is expected until the Fed or banks grow their balance sheets.
Market Dynamics
Hayes's reliance on the .USDLIQ index reflects a liquidity-driven framework for crypto that treats central bank and bank balance sheet growth as the main driver of Bitcoin prices. The shift from his October 15 bullish call to selling and sitting out the market shows how quickly such a framework can flip when liquidity expectations change.
Investors holding Bitcoin or Ethereum face the prospect of continued price weakness if Hayes's liquidity thesis holds, which would affect portfolio values until balance sheet expansion occurs. Individuals with crypto exposure should weigh how sensitive their holdings are to central bank and bank liquidity decisions.
The takeaway
Liquidity conditions, not only crypto-specific news, can drive Bitcoin prices, so tracking indicators like the .USDLIQ index can help readers interpret sudden shifts in market positioning.
Further reading
Explore more on Economic Indicators to see how liquidity measures like the USDLIQ index are tracked.
Source note: This article includes information reported by BeInCrypto.
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