Arthur Hayes Foresees Bitcoin Correction to $90K Before Bank-Issued Stablecoins Fuel Next Rally

BitMEX co-founder Arthur Hayes predicts Bitcoin could temporarily retreat to $90,000 before institutional-grade stablecoins from major US banks spark the next cryptocurrency bull run. In a detailed market analysis published Thursday, the crypto pioneer explained how upcoming Fed-regulated stablecoins may redirect trillions into digital assets.

Hayes contends that markets currently underestimate the transformative potential of dollar-pegged stablecoins issued by systemically important banks like JPMorgan. Unlike existing offerings such as Tether or Circle's USDC, these institutional stablecoins could revolutionize capital flows by converting stagnant bank deposits into liquid instruments for Treasury investments.

"The GENIUS Act's passage sets the stage for banks to monetize deposits through stablecoin issuance," Hayes stated, referencing the landmark crypto legislation recently approved by the US Senate. He estimates that if banks convert even a portion of their $17 trillion in deposits into stablecoin products, it could generate $6.8 trillion in fresh demand for US Treasuries.

While anticipating short-term volatility that may push Bitcoin down to $90,000, Hayes maintains a bullish long-term outlook. He compares the expected stablecoin adoption to quantitative easing, noting that bank-issued tokens will provide structural liquidity without requiring direct Fed intervention. This liquidity wave, he argues, will ultimately benefit risk assets including Bitcoin and tech stocks.

The analysis comes as regulatory clarity emerges for stablecoins, with the GENIUS Act establishing America's first comprehensive framework for dollar-pegged tokens. Hayes believes regulated bank stablecoins will dominate the market due to their FDIC-insured backing, existing compliance infrastructure, and direct Fed access - advantages that could reshape global capital allocation.