Former BitMEX CEO Arthur Hayes has linked Bitcoin's recent price weakness to a significant contraction in U.S. dollar liquidity, arguing the decline is a macro-driven event rather than a crypto-specific issue. In a post on X, Hayes pointed to a roughly $300 billion drop in dollar liquidity over recent weeks, primarily driven by a $200 billion increase in the U.S. Treasury General Account (TGA).
Hayes suggested the government may be rebuilding cash buffers to fund potential spending in case of a shutdown, effectively pulling liquidity from the financial system. This tightening is reflected in the USDLIQ index, a broad dollar liquidity tracker, which has fallen nearly 7% over the past six months, sliding from highs near 11.8 million in August to around 10.88 million by late January 2026.
"$BTC falling not a surprise given the fall in $ liquidity," Hayes wrote, directly connecting Bitcoin's performance to these macro forces. He emphasized that periods of expanding dollar supply have historically coincided with strong crypto rallies, while contractions lead to pressure on risk assets like Bitcoin as leverage unwinds and risk appetite fades.
The analysis comes as Bitcoin failed to regain momentum, falling back below $89,000 (and briefly to $82,000 according to one source) after a short-lived rebound. Analysts note that a neutral-to-hawkish Federal Reserve stance, with Chair Jerome Powell signaling little urgency to cut rates, combined with rising geopolitical tensions, has further sapped risk appetite. This has led to a 42% drop in crypto futures open interest from record highs and a capital rotation toward traditional havens like gold and silver.
Hayes' commentary shifts the focus from crypto-specific catalysts, such as ETF inflows, to broader "macro plumbing" factors like Treasury cash management and dollar availability as near-term headwinds for Bitcoin and the wider digital asset market.
