Arthur Hayes Warns of Bitcoin Weakness if Fed Balance Sheets Remain Flat
Arthur Hayes, co-founder of BitMEX, expressed concerns on November 3, 2026, regarding Bitcoin's near-term outlook. He argues that Bitcoin's performance is closely tied to US dollar liquidity and faces continued weakness unless the Federal Reserve or commercial banks expand their balance sheets. The .USDLIQ gauge, which tracks global dollar liquidity, reported a value of 32.71 million on November 2, a 4.49% increase since January but 0.6% below its October peak.
Arthur Hayes sees Bitcoin weakness if the Fed and banks do not expand their balance sheets.
Bitcoin's performance is closely tied to US dollar liquidity.
The .USDLIQ gauge was at 32.71 million on November 2, 0.6% below its October peak.
The Fed held rates steady, but markets price a high chance of a December hike.
Story
Arthur Hayes, co-founder of BitMEX and Chief Investment Officer at Maelstrom, expressed his concerns on November 3, 2026, regarding Bitcoin's near-term outlook. He sees a close connection between Bitcoin's performance and US dollar liquidity within the global financial system. Hayes believes that Bitcoin could face continued pressure unless the Federal Reserve or commercial banks resume expanding their balance sheets. The .USDLIQ gauge, which tracks global dollar liquidity, was at 32.71 million on November 2. While this represents a 4.49% increase since January, it is 0.6% below its October peak. The Fed held rates at 3.75%–4.00% on October 28, with some governors dissenting in favor of a hike, and markets have priced in a 71% chance of a December hike. Hayes's perspective emphasizes the macroeconomic liquidity environment as a primary driver for Bitcoin. A hawkish lean from the Fed, coupled with strong economic data, suggests a challenging environment for risk assets if liquidity does not expand. This underscores the importance of monetary policy for the crypto market's trajectory.
Issue context
The crypto market is experiencing a downturn, with the total market capitalization decreasing by 3.17% over the last 24 hours to $2.6 trillion. Bitcoin and Ethereum are also seeing declines, while the Fear & Greed Index registers "Fear" at 26. Despite these price drops, funding rates for BTC, ETH, and SOL perpetual markets remain positive, suggesting that long positions are still paying shorts. This issue examines recent security incidents, macroeconomic influences, and regulatory developments shaping the market during this period of uncertainty.
Current market conditions show increased volatility and uncertainty. While Binance's fund flows are stabilizing, recent hacks serve as a reminder of ongoing security risks within the ecosystem. Pay attention to macroeconomic developments and regulatory changes, as these can continue to heavily influence market sentiment and liquidity. Your risk appetite should account for these factors.
Market pulse
BTC
$76.8K
-1.54% 24h / -4.25% 7d
Fear & Greed
26
Fear
BTC Funding
+0.0085%
20 perp markets · Open Interest $53.5B
BTC Open Interest
$53.5B
24h volume $60.6B · basis +0.014%
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This story is part of the Biturai Market Brief and is for informational purposes only. No investment advice.