If you've been wondering why Bitcoin (BTC) sat there doing nothing while gold went absolutely vertical in 2025, BitMEX co-founder Arthur Hayes has a straightforward answer: follow the dollar liquidity.

It's The Liquidity, Stupid

The Professional Capital Management CEO laid out the case in his latest essay. Bitcoin didn't underperform because something broke or because crypto lost its narrative. It underperformed because the thing that actually moves Bitcoin—dollar liquidity—was shrinking.

Meanwhile, gold had its own tailwinds. Central banks have been dumping U.S. treasuries ever since Russia's $300 billion in assets got frozen in 2022. Venezuela's recent military moves only accelerated the shift toward reserves that can't be confiscated with the stroke of a pen.

Tech stocks kept climbing because Donald Trump made AI a national priority, giving those companies a political advantage that Bitcoin simply didn't have.

So Bitcoin tracked the one variable that matters most: dollar supply. And dollar supply was going down.

Three Liquidity Catalysts Just Switched On

Hayes sees three specific mechanisms now pumping dollars back into the system.

First, the Federal Reserve stopped shrinking its balance sheet in December and launched a new program that's adding at least $40 billion per month into markets.

Second, JPMorgan Chase (JPM) created a $1.5 trillion loan program for industries the government labels "strategic." When banks make loans, they literally create new money. Federal Reserve data shows bank lending turned positive in Q4 2025 after contracting most of the year.

Third, President Trump ordered Fannie Mae and Freddie Mac to buy $200 billion worth of mortgages. Lower mortgage rates mean homeowners can tap their home equity and spend that money—basically election-year stimulus disguised as housing policy.

Why Gold Went Parabolic

December trade data reveals what's really driving gold's rally. The U.S. trade deficit dropped 11% to $52.8 billion—the lowest since June 2020. According to Commerce Department data reported by the Financial Times, over 100% of that improvement came from gold exports.

The wild part? Retail investors aren't even participating. SPDR Gold Trust (GLD) holdings keep shrinking, which means the real mania hasn't started yet. Hayes calculates gold could hit $12,000 if central banks maintain their current buying pace.

Hayes Goes All-In On Leveraged Bitcoin

Hayes said he bought Strategy Inc. (MSTR) and Metaplanet Inc. (MTPLF)—two companies that borrow money specifically to buy Bitcoin.

Both stocks trade near two-year lows relative to Bitcoin's price. If BTC climbs back to $110,000, these companies should outperform dramatically because they hold Bitcoin bought with borrowed money.

Hayes runs the Maelstrom fund and says he's "nearly fully invested" but adding more risk anyway because the liquidity wave looks inevitable at this point.

What Comes Next

Bitcoin bottomed alongside dollar liquidity in late 2025. That liquidity has now turned decisively higher.

With the Fed easing, banks lending again, and housing stimulus incoming, Bitcoin becomes the most direct, leveraged bet on renewed dollar expansion. Hayes is betting that 2026 looks nothing like 2025—and he's putting serious money behind that view.