Why Bitcoin Could Surge to $200,000: Arthur Hayes’ “Ski Cut” Perspective

Local Bottom Behind Us

Hayes argues that the local bottom of this bull cycle was reached at $74,500. Having rebounded from this level—“the trough of this bull market”—Bitcoin is now positioned for its next leg up.

Bitcoin as Digital Gold

With future liquidity injections aimed at softening the US–China “divorce” fallout, Hayes sees Bitcoin as the direct beneficiary of rising dollar supply. Investors disillusioned by fiat policies and tariff warfare will seek a store of value—in the physical realm gold, but in the digital realm Bitcoin.

Detachment from Tech Stocks and Rally beyond $110,000

According to Hayes, Bitcoin will shed its correlation with US tech equities and realign with gold-like growth. He anticipates Bitcoin will surpass its previous all-time high of $110,000, and though it may fall just short of $200,000, it will get very close.

AltSzn: Rotation into Altcoins

Once Bitcoin breaks above $110,000 and nears $200,000, Hayes forecasts a capital rotation into altcoins (AltSzn). The winners will be projects generating real revenue and distributing earnings to staking holders—only a handful of which meet these criteria today.

Rationale Behind the Forecast

1. Treasury Buyback Program

• The US Treasury issues new bonds and uses proceeds to buy back off-the-run, less liquid issues.

• This elevates prices of those bonds and narrows the basis spread, benefitting relative-value (RV) funds.

2. Rising US Budget Deficit

• The 2025 fiscal-year deficit is already 22% higher than last year’s for the same period.

• Tariff policies and a down market will further depress tax revenues, forcing more borrowing.

3. Financing for RV Funds

Treasury Secretary Yellen will need to ramp up debt issuance and ensure RV funds can increase positions in basis trades.

4. Potential Fed Measures

• SLR Relief: Exempting Treasuries from supplementary leverage ratios for banks, enabling unlimited leveraged buying.

• QT Twist: Reinvesting mortgage-backed-securities redemptions into Treasuries, adding ~$35 billion of monthly buying pressure.

5. Volatility Control

Investors now know what level of bond volatility (MOVE index) the administration will tolerate before easing policy. Next time Trump hits the “tariff button,” Bitcoin won’t crash alongside equities.

6. Dollar Liquidity

The more debt created and leveraged through banks, the greater the money supply growth. In an era of excessive fiat issuance, the prime asset to hold is Bitcoin.

Key Dates to Watch

• May 1: Treasury’s Quarterly Refunding Announcement (QRA) reveals the borrowing schedule.

• Mid-May: Official deficit/surplus data for April is published.