•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Arthur Hayes said Bitcoin’s macro setup is turning bullish again, arguing that wartime spending, US fiscal deficits and bank-led credit creation could outweigh concerns about a smaller Federal Reserve balance sheet. Speaking at the Bitcoin 2026 conference in Las Vegas, the BitMEX co-founder said Bitcoin is increasingly trading as a response to “wartime inflation,” not only the artificial intelligence cycle.
Hayes’ central premise is that governments are preparing to spend more on defense, and that such spending must be financed. In his view, this places Bitcoin back in a familiar role as a liquidity-sensitive asset with a hard-money narrative.
“Since the war has started, Bitcoin has outperformed,” Hayes said. “It outperformed NASDAQ and outperformed the SaaS stocks. And basically, I think that Bitcoin is now focusing on wartime inflation.”
He said the key is not a sudden return to explicit quantitative easing, but a potential reshuffling of balance sheets between the Federal Reserve and the commercial banking system—one that could allow officials to argue the Fed is shrinking while the broader dollar liquidity picture remains largely intact.
Hayes addressed market concerns around Kevin Warsh, whom investors have viewed as potentially hawkish due to criticism of the central bank’s large balance sheet. Hayes said those fears do not fully account for constraints facing monetary officials while the US government continues issuing large amounts of debt.
“If the market believes that there’s going to be less dollar liquidity floating around the system because of what Warsh will do with the Fed, then they’ll be bearish on Bitcoin and other risk assets,” Hayes said. “This is what we’ve seen in the media talking about sort of this [hawkish Fed that’s going to come into place after May] when Warsh takes over. Now, I don’t believe that’s the case.”
According to Hayes, Warsh would be constrained by the Treasury’s need to keep the bond market functioning. He argued the Fed cannot pursue balance-sheet reduction in isolation when the US must continue funding deficits.
“At the end of the day, when you’ve issued $38 trillion of debt and you need to fund the government, the Federal Reserve will do what it’s asked to do, which is make sure the market is orderly so that people can buy this debt,” Hayes said.
Hayes’ mechanism centers on a swap in which commercial banks reduce holdings of Fed reserves and replace them with Treasuries and repos. In that scenario, the Fed’s balance sheet could be smaller on paper, while the banking system holds more government debt.
“The point of all this is that the net effect on dollar liquidity is neutral,” Hayes said. “There’s nothing being sold, there’s nothing being bought. It’s just a swap. It’s purely regulatory fiction in terms of who is allowed to hold what.”
He said investors should focus less on the stated size of the Fed’s balance sheet and more on whether the overall system is creating or destroying dollar liquidity. If debt migrates from the Fed to regulated bank balance sheets, Hayes argued the impact may be less restrictive than markets fear.
Hayes also pointed to the demand side of the lending cycle. He said defense spending, critical resource production and AI infrastructure are becoming national-security priorities, creating borrowers with government-backed demand and improving credit profiles for banks.
“Why will banks have demand for loans? One of the criticisms about this analysis from some of my other macro-fans is that they claim the banking system is not creating enough loans or there’s not enough demand,” Hayes said. “Well, we have a great source of demand that is the US Department of War.”
He said banks would lend to defense suppliers, resource miners and hyperscalers as AI capital expenditure becomes part of the national-security framework. Hayes described bank lending as especially important because, in his view, it carries a higher multiplier than central bank lending, estimating that around $4 trillion in credit could ultimately be created.
Hayes said his liquidity chart bottomed in November of last year, around the same time as Bitcoin, and argued that after a period of war-driven uncertainty, the market may be ready to move higher.
“I think we’ve had a bit of a chop. We’ve had a bit of a war. Now it’s time to break out,” Hayes said. “And that’s why I believe Bitcoin is going higher.”
At press time, Bitcoin traded at $76,628.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
