Bitcoin value may reach between $750,000 and $1 million by 2026, according to Arthur Hayes.

Whether one admires or criticizes him, Arthur Hayes commands attention when he shares his insights.

During his recent appearance on Impact Theory with Tom Bilyeu, Hayes articulated his belief that Bitcoin (BTC) could reach a price range of $750,000 to $1 million by 2026.

Hayes stated,

“I absolutely agree that there is going to be a major financial crisis, probably as bad or worse than the great depression, sometime near the end of the decade, before we get there we’re gonna have, I think, the largest bull market in stocks, real estate, crypto, art, you name it, that we’ve ever seen since WW2.”

He pointed to the almost predictable reaction of the United States government intervening in every economic downturn with bailouts as a significant factor contributing to the structural issues within the US economy.

He elaborated that this effectively establishes a perpetual cycle of central bank money creation, which results in inflation and hinders the economy from experiencing natural phases of growth and correction.

“We all have collectively agreed that the government is there essentially to attempt to remove the business cycle. Like, there should never be bad things that happen to the economy and if there are, we want the government to come in and destroy the free market. So every time we’ve had a financial crisis over the past 80 years. What happens? The government rushes in and they essentially destroy some part of the free market because they want to save the system.”

Let’s briefly examine some of the factors that Hayes believes will support Bitcoin’s ascent into six-figure territory.

Escalating debt and rampant inflation.

Hayes asserts that increasing government debt, a significant amount that needs to be refinanced, and declining productivity can only be managed through money printing. While monetary expansion tends to generate bull markets, it also typically results in elevated inflation.

“In the first instance it creates a massive bull market in stocks, crypto, real estate, things that have a fixed supply, maybe they’re productive and have some earnings. But after that, we’re going to find out that, actually, the government can save everything. It can’t just print as much money as they think to try to save themselves by fixing the yield and price of their bonds and we’re going to get a generational collapse.”

Hayes anticipates a “massive top” occurring at some point in 2026, followed by a situation reminiscent of the Great Depression by the decade’s end.

The US Government has bankrupted the banking system

When questioned about future inflation drivers, Hayes focused on the $7.75 trillion in US debt that must be refinanced by 2026 and the inversion of the yield curve in US bonds.

Historically, China, Japan, and other countries were the primary purchasers of US debt, but this is no longer the case, a shift that Hayes believes will worsen the situation domestically.

Why do I love these markets right now when yields are screaming higher?
Bank models have no concept of a bear steepener occurring. Take a look at the top right quadrant of historical interest rate regimes.
It's basically empty. pic.twitter.com/P6MQnCU73N

— Arthur Hayes (@CryptoHayes) October 4, 2023

Hayes claims that “the US banking system is functionally insolvent because the regulators made the rules in such a way that it was profitable from an accounting perspective, not an economic perspective, to essentially take in deposits and buy low yielding treasuries and they could do it with almost infinite leverage and a few basis points differing in the change of the price and everyone makes a lot of money and gets a big bonus.”

“The banks collectively bought all these treasuries in 2021 and obviously the price went down a lot since then and that’s why we have the regional banking crisis.”

Hayes’ primary concern is that “at a structural level, the US banking system cannot buy more debt, because it cannot afford to because it is structurally insolvent. The Federal Reserve has committed to doing quantitative tightening, so it's not accumulating more treasuries.”

He explained that the market is processing this, and the subtlety here is that despite high yields on treasuries, gold prices remain elevated and certain market participants who previously purchased treasuries are now uninterested.

Currently, banks are facing challenges in attracting deposits, and the difficulty in aligning their deposit rates with the current market rates creates revenue and debt management pressures that could become critical to the overall functionality of the banking system. Like many advocates of cryptocurrency, Hayes believes that during such times, a segment of investors begins to explore alternative investment avenues, including Bitcoin.

Hayes’ perspective on why Bitcoin is poised for $750,000

Despite what seems to be a generally bleak outlook for the global and U.S. economy, Hayes remains optimistic about Bitcoin’s performance, estimating its price to fall within the $750,000 to $1 million range by the end of 2026.

Hayes anticipates Bitcoin will continue,

“Chopping around $25,000 to $30,000 this year as we get to some sort of financial disturbance and people recognize that real rates are negative. If the economy is growing at a nominal rate of 10%, but I’m only getting 5% or 6%, even though it's high, people on the margin are going to start buying other stuff, crypto being one of those things.”

As 2024 approaches, Hayes indicated that either a financial crisis will drive rates closer to 0% or the government will continue to raise rates, but not as rapidly as government spending increases, prompting people to seek better returns elsewhere.

The anticipated approval of a spot Bitcoin ETF in the U.S., Europe, and possibly Hong Kong, along with the halving event, could propel the price to a new all-time high of $70,000 in June or July of 2024. Reaching the previous all-time high by the end of 2024 is when the “real fun starts and the real bull market starts” and Bitcoin enters the “$750,000 to $1 million on the upside.”

When asked if the projected price level would hold, Hayes acknowledged that a 70% to 90% decline would likely occur in BTC price, similar to what has happened following each bull market.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.