Arthur Hayes links a possible 2026 Bitcoin bull run to Fed balance sheet growth, yen strength, ETF flows, and global liquidity trends.
Arthur Hayes has presented a scenario where Bitcoin could see renewed upward momentum in 2026, despite mixed market signals.
His view is based on global monetary actions, currency movements, and central bank behavior rather than current price trends.
Fed Balance Sheet Expansion and Currency Dynamics
Arthur Hayes linked his outlook to possible intervention by the US Federal Reserve in currency markets.
He referenced reports that the New York Fed checked dollar-to-yen levels to support the Japanese currency.
He stated, “Very bullish if true for BTC,” while explaining the mechanics behind such actions.
Very boolish if true for $BTC. This assumes Fed prints $, creates banking reserves. $’s are then sold to buy yen. If the Fed is manipulating the yen, we will see its b/s grow via the Foreign currency denominated assets line item which comes out weekly in the H.4.1 release. pic.twitter.com/MrmWfGG1NR
— Arthur Hayes (@CryptoHayes) January 23, 2026
According to Hayes, if the Fed sells dollars to buy yen, it would create additional banking reserves.
These reserves would expand the Fed’s balance sheet through foreign currency assets. He noted that these changes are reported weekly in the H.4.1 release.
Hayes argued that balance sheet expansion often supports risk assets. Bitcoin has historically reacted to increased global liquidity.
However, no official intervention has been confirmed by the US Treasury so far.
Yen Strength and the Bank of Japan’s Policy Stance
The Japanese yen recently rose to its strongest level in months. Bloomberg reported a rise of about 1.75 percent, reaching near 155.63 per dollar.
This followed speculation around policy actions by Japanese authorities.
The Bank of Japan kept its interest rates unchanged last week. This decision came after market rumors suggested a possible rate hike.
The move helped calm markets that had feared sudden volatility.
Earlier forecasts linked yen strength to a potential Bitcoin drop toward $70,000.
Hayes rejected this view and suggested the opposite outcome if US policy actions support yen stability through liquidity creation.
Related Reading: Arthur Hayes Says Dollar Liquidity Held Bitcoin Back in 2025, Sees Better Setup in 2026
Market Bets and Institutional Fund Flows
While Hayes outlined a bullish framework, traders have positioned for near-term downside.
Data from Polymarket shows many participants expect Bitcoin to fall toward $80,000 before any recovery. This reflects caution rather than confirmation of a rally.
Institutional activity has also shown restraint. Bitcoin exchange-traded funds recorded a net outflow of $104 million in a single day.
This marked the fifth consecutive day of outflows for these products.
Over the past week, more than $1.4 billion exited Bitcoin ETFs, according to SoSoValue.
This followed a strong prior week when inflows reached their highest level since October. The shift shows changing sentiment amid macro uncertainty.
Arthur Hayes continues to focus on global liquidity trends rather than short-term price action.
His 2026 outlook remains tied to central bank behavior and currency market responses. Market participants remain divided, and current data reflects caution alongside selective optimism.