Arthur Hayes, Chief Investment Officer at Maelstrom and co-founder and former CEO of BitMEX, has published a new essay titled “The Ugly”. In it, he argues that Bitcoin may experience a significant short-term pullback before surging to record highs. Hayes outlines two key scenarios for buying Bitcoin.
A Market Correction Before a Massive Rally?
Hayes begins by comparing market analysis to backcountry skiing on a dormant volcano—where sudden shifts in conditions can signal impending danger. He recalls a similar feeling from late 2021, just before crypto markets crashed from all-time highs.
He highlights subtle indicators such as central bank balance sheet movements, banking credit expansion, and the relationship between U.S. Treasury yields, stocks, and Bitcoin. These factors, he says, resemble market conditions before the 2022 and 2023 downturns. Despite this, Hayes does not believe the broader Bitcoin bull cycle is over. However, he anticipates a potential dip to the $70,000–$75,000 range before a sharp rebound, potentially pushing Bitcoin to $250,000 by the end of the year.
Hayes’ Strategy: Scaling Back to Reinvest Lower
Given the current macroeconomic environment—characterized by inflation concerns and rising interest rates—Hayes describes Bitcoin’s price movements as being closely tied to broader financial markets. His investment firm, Maelstrom, remains net long on Bitcoin while increasing its holdings in USDe stablecoins, positioning itself to buy back Bitcoin if it drops below $75,000.
Hayes sees a potential 30% correction as a realistic scenario. However, he also acknowledges that Bitcoin could continue rising. His second buy trigger? If Bitcoin breaks above $110,000 on strong volume with expanding perpetual futures open interest, he will “throw in the towel” and buy back at higher levels.
Central Banks, Interest Rates, and Bitcoin’s Future
Hayes attributes potential downside pressure to monetary policy decisions by major central banks, including the Federal Reserve (Fed), the People’s Bank of China (PBOC), and the Bank of Japan. These institutions, he notes, are either limiting money creation or allowing bond yields to rise—moves that could drain liquidity from speculative
