Arthur Hayes: Altcoins may no longer rise, Bitcoin will reach $250,000 by the end of the year

In a recent interview with Bonnie Blockchain, Arthur Hayes, former CEO of BitMEX and a prominent figure in the cryptocurrency industry, shared his outlook for the crypto market, forecasting a significant price surge for Bitcoin (BTC) to $250,000 by the end of the year. However, he issued a stark warning about altcoins, suggesting that most are unlikely to see substantial gains due to a lack of product-market fit and weak fundamentals.

Bitcoin’s Path to $250,000

Hayes’ bullish Bitcoin prediction is rooted in his expectation of expansive monetary policies and increased credit creation in the U.S. economy. He estimates that approximately $9 trillion in liquidity will be injected into global markets between now and 2028, driven by government support for mortgage-backed securities and loosened banking regulations. “The banks are gonna free because they now don't have to handle all this equity capital against their treasury book,” Hayes explained. “They can lend more into the real American economy. You’re gonna see the amount of loans going to manufacturing firms increase, which is, again, an increase in credit and that will make its way into crypto.”

Bitcoin’s fixed supply of 21 million coins positions it to outperform other asset classes in an environment of aggressive money printing, according to Hayes. “Bitcoin has a fixed supply. It's obviously a much smaller market in terms of market cap. If you have a lot of things chasing a very small door, then the price goes up on the margin,” he noted, emphasizing Bitcoin’s historical outperformance over the past 15 years. At the time of writing, Bitcoin is trading at approximately $105,000, reflecting a 12.29% year-to-date gain.

Hayes also addressed the lack of retail investor enthusiasm compared to the 2021 bull market, attributing it to Bitcoin’s growing institutional appeal. “I’m sure there’s still lots of retail interest in Bitcoin. It’s been performing well, and it’s the easiest one to understand,” he said, dismissing the notion that it has become solely an institutional asset.

Altcoins: A Bleak Outlook

While Hayes is optimistic about Bitcoin, his view on altcoins is far more cautious. He argued that the majority lack “product-market fit,” meaning their products fail to meet market demand or generate revenue for token holders. Hayes pointed to high fully diluted valuations (FDVs) and low circulating supply as structural barriers to price appreciation, citing projects like Berachain and Monad as examples of hyped tokens that have struggled post-launch. “These hyped, big fundraising round projects will struggle to increase in price because they don’t have clients spending money,” he stated.

The former BitMEX CEO highlighted a shift in investor priorities toward cash flow-generating projects. “There are projects with product-market fit, where people spend money, and that money flows from the protocol to token holders,” he said, naming Pendle and EtherFi as examples of protocols with strong fundamentals. These projects, he noted, distribute revenue to token holders, creating a sustainable value proposition.

Hayes also predicted that Bitcoin’s market dominance, currently at 65%, could rise to 70%, driven partly by Ethereum’s underperformance. “I think Ethereum is very hated right now. People don’t like it. If I were to bet on something changing this cycle, I think it could be Ethereum,” he remarked, suggesting that a shift in sentiment toward Ethereum could alter market dynamics. Ethereum is trading at around $2,540, down 8.0% over the past week.

Implications for Investors

Hayes’ analysis underscores a growing divide in the crypto market between Bitcoin and altcoins. His perspective aligns with many institutional analysts. Despite investors’ anticipation of a broad altcoin rally, data suggests that altcoins lacking innovation and new narrative hype struggle to attract market capital. CryptoQuant analyst Burak Kesmeci noted that the “1-Year Cumulative Buy/Sell Quote Volume Difference for Altcoins (Excluding BTC & ETH)” currently stands at -$36 billion, indicating extremely low altcoin investor activity. This metric has been declining since turning negative in December 2024, suggesting that despite Bitcoin’s bull market, the altcoin market remains in a “winter” state. Unless this indicator begins to recover, a full-blown altseason or altcoin FOMO might just be wishful thinking.

For investors, Arthur’s remarks highlight the importance of evaluating projects based on revenue generation and user adoption rather than narrative-driven hype.

While Hayes’ $250,000 Bitcoin target is ambitious, it aligns with his long-term view of a $1 million Bitcoin by 2028, driven by global liquidity trends. However, his bearish stance on altcoins may prompt investors to reassess their portfolios, focusing on protocols with tangible cash flows and lower valuations.

As the crypto market navigates this cycle, Hayes’ insights offer a sobering reminder of the need for due diligence in an industry often fueled by speculation. Whether Bitcoin reaches $250,000 or altcoins defy his predictions remains to be seen, but his emphasis on fundamentals could shape investor strategies moving forward.