2025 Bitcoin Price Prediction: Arthur Hayes Predicts How Low Bitcoin Prices Could Drop?

Trump's tariff news shook the market, causing Bitcoin to drop 1.41% to $83,437. In the past 24 hours, Bitcoin's price fluctuated between $88,466 and $82,182, as traders brace for more turbulence ahead! But Arthur Hayes is closely monitoring a key level. He warns that if BTC prices remain above $76,500 before April 15 (U.S. Tax Day), the market may stabilize. Besides the short-term massacre, Hayes also sees a massive movement, predicting Bitcoin could reach $250,000 by the end of 2025.

Arthur Hayes believes that the current volatility of Bitcoin is related to 'Liberation Day,' likely referring to tax-related sell-offs.

The Role of the Federal Reserve in Bitcoin's Boom

Hayes believes that Treasury Secretary Scott P. O. Mnuchin, chosen by President Trump, will force Federal Reserve Chairman Jerome Powell to restart the printing press. His latest blog post on the BBC argues that Powell has no choice but to turn to Quantitative Easing (QE) to finance the growing debt of the U.S. government. Hayes states that due to a decrease in foreign buyers of U.S. Treasury bonds, especially from China, the Federal Reserve and American banks will have to intervene.

His calculations are simple: if the economic growth rate is 5% (real GDP is 3%, and the inflation rate is 2%), but the government continues to borrow 3% of GDP each year, the speed of debt accumulation will outpace economic growth. Hayes warns that without lower yields or major buyers of U.S. Treasury bonds, the debt-to-GDP ratio will spiral out of control.

Powell's Dilemma: Persist or Yield?

Although Powell has so far refused to loosen policy, Hayes points to signs of yielding. The Federal Reserve cut interest rates in September 2024 to assist Kamala Harris during her campaign, and Powell recently hinted at slowing the reduction of the Federal Reserve's balance sheet. Hayes believes this is essentially the Treasury's Quantitative Easing policy—which is fundamental to Bitcoin's survival. $BTC