Despite Bitcoin’s sharp correction, market veterans Arthur Hayes and Matt Hougan see structural liquidity and institutional demand setting the stage for a major rebound.
Bitcoin Falls Below $100K Amid Market Fear
Bitcoin’s drop under $100,000 this week — its lowest level since June — has triggered anxiety across the crypto market. Yet, seasoned industry voices believe this downturn could be the final flush before the next rally.
Matt Hougan, Chief Investment Officer at Bitwise, called the correction a “classic retail capitulation.”
“Crypto retail is in max desperation,” Hougan said in an interview on Tuesday. “We’ve seen leverage blowouts and sentiment collapse — this is the point where markets typically reset.”
He added that institutional investors remain confident, even as retail traders exit in panic.
“When I talk to financial advisers, they’re still interested in Bitcoin as a long-term asset. If you zoom out over the past year, returns are still exceptional,” Hougan noted.
According to him, once the retail flush-out ends, institutional inflows could send Bitcoin to new all-time highs, potentially in the $125,000–$130,000 range by year-end.
Arthur Hayes Predicts ‘Stealth QE’ to Reignite Bitcoin
Former BitMEX CEO Arthur Hayes shared a more macroeconomic perspective. In a recent essay, he argued that the U.S. government’s soaring debt will soon pressure the Federal Reserve into what he calls “stealth quantitative easing” — a covert expansion of liquidity through the Standing Repo Facility to support Treasury markets.
“If the Fed’s balance sheet grows, that’s dollar liquidity positive — and ultimately pumps the price of Bitcoin,” Hayes wrote, predicting that “rising government borrowing and quiet liquidity creation will reignite the Bitcoin bull market.”
Quantitative easing, or QE, involves central banks buying government bonds to inject money into the economy — a process that historically correlates with Bitcoin price rallies.
Bear Market Label Meets Bullish Long-Term Outlook
Analysts at The Kobeissi Letter confirmed on Tuesday that Bitcoin has officially entered bear market territory, having fallen more than 20% from its October high. Yet, some experts see this as a temporary correction within a larger bullish cycle.
Despite near-term volatility, both Hayes and Hougan agree that liquidity expansion, not sentiment, will determine Bitcoin’s next major move — and that move, they believe, is still upward.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.