Arthur Hayes Says Bitcoin Could Stay Weak Until Fed or Banks Expand Balance Sheets

Maelstrom co-founder and Chief Investment Officer Arthur Hayes said Bitcoin could remain weak until the Federal Reserve or commercial banks expand their balance sheets, putting bank activity alongside central bank policy in his liquidity outlook.

“USD liquidity is recharging. Expect $BTC weakness until Fed and or Banks start growing their balance sheet,” Hayes wrote in an X post at 8:16 p.m. ET Monday, Nov. 2 (1:16 a.m. UTC Tuesday, Nov. 3).

The two channels involve different parts of the financial system. When the Federal Reserve buys Treasury securities from private markets, it adds reserve balances to banks’ accounts at the central bank. Those reserves are held by banks; they are separate from the customer deposits commercial banks provide.

Commercial banks can create customer deposits when they lend to nonbank borrowers or buy assets from nonbank sellers. Hayes did not identify specific banks, define the balance-sheet measure he was watching or say how much growth would matter. He gave no timeline for the condition in his post.

The post expressed a market view, not a policy decision or a report that bank lending had increased. It also did not say that the balance-sheet expansion Hayes described had begun.

Hayes discussed AI-related debt and a possible liquidity response in his Oct. 2 remarks.