TLDR
- Arthur Hayes predicts that Bitcoin will reach $250,000 by the end of 2025.
- He expects Ethereum to rise to $10,000 during the same period.
- Hayes links the crypto surge to increasing global military spending and inflation.
- He believes governments will fund war-driven spending through central bank liquidity rather than tax hikes.
- Hayes states that crypto assets like Bitcoin benefit from inflation without causing social unrest.
Arthur Hayes predicts a historic rally in digital assets, driven by rising government debt, military spending, and inflationary policy. He projects Bitcoin price to reach $250,000 and Ethereum to touch $10,000 by the end of 2025. This forecast reflects his belief in a war-driven fiscal expansion cycle benefiting scarce, global, and non-political assets like cryptocurrencies.
Bitcoin Price Set for Record Surge in Wartime Spending Cycle
Arthur Hayes sees unprecedented global military expenditures as a major macro trigger for crypto’s explosive growth through 2025. He links the rising U.S. defense budget, which crossed $1 trillion in 2024, to aggressive borrowing trends. As central banks avoid raising taxes, they expand balance sheets to finance spending, injecting more liquidity into markets.
This credit-driven expansion pushes interest rates down and weakens real yields, leading investors toward alternative stores of value. Hayes positions the Bitcoin price as a primary beneficiary of this capital shift, as it remains limited in supply and borderless. Consequently, demand for crypto rises without affecting essential goods like food or housing.
While traditional inflation hedges struggle under policy shifts, Bitcoin presents a decentralized option that does not threaten economic stability. This creates a financial “escape valve” for excess liquidity, reducing risks of social unrest. Hayes views this unique property as central to Bitcoin’s market appeal in the current cycle.
Ethereum Gains Momentum with Support from Institutional and Political Channels
Ethereum may follow a parallel trajectory as structural demand builds through increasing integration into traditional finance. Hayes expects Ethereum to reach $10,000 due to growing adoption among retirement plans and asset managers. The network’s programmability and deflationary mechanics enhance its appeal amid rising liquidity and global instability.
Institutional players continue to explore Ethereum-linked products, expanding exposure beyond early adopters. Meanwhile, political signals point to bipartisan support for clearer digital asset regulations. These developments could support Ethereum’s upward move as regulatory uncertainty decreases.
Furthermore, Ethereum benefits from its role in decentralized finance, which gains traction during fiat instability. Hayes believes this function will attract long-term capital inflows. As monetary expansion fuels inflation, Ethereum’s fixed-supply dynamics offer refuge for capital seeking safety and yield.
Fiscal Expansion, Not Tax Hikes, Drives Market Repricing
Hayes identifies a key driver behind his projections: governments choose monetary expansion over taxation to fund escalating conflicts and policies. The resulting negative real rates distort traditional markets and push capital into risk assets. Crypto stands out as a politically neutral beneficiary in this environment.
He highlights the changing economic structure, comparing it to wartime financing but with modern tools like central bank digital liquidity. In this system, Bitcoin price gains are not just speculative but reflective of broader macro forces. This reinforces crypto’s role as a reliable alternative asset.
