Arthur Hayes Reveals 2026 Investment Blueprint: 90% of Firepower Used Up, Awaiting Liquidity Turnaround

Key Points Overview

Arthur Hayes, a seasoned analyst in the crypto market, recently elaborated on his outlook for 2026 during a podcast. He believes that although the market faces short-term pressure, the Federal Reserve’s covert liquidity expansion policies will drive asset prices higher, and Bitcoin is poised to regain its upward momentum. Notably, Hayes revealed that his team has deployed about 90% of their capital, keeping only a portion of liquidity to respond to volatility.

Bank of Japan Rate Hike: A Fine-Tuning, Not a Turning Point

The latest macro event is the Bank of Japan’s interest rate decision. Hayes analyzes that the BOJ’s move from 0.5% to around 0.25% is actually of limited impact. In the context of an official inflation rate maintained at 3%, this adjustment is almost meaningless on a macro level. He points out that USD/JPY in the 155-160 range is the BOJ’s red line, and the central bank will take necessary measures to prevent the yen from depreciating out of control, but this is insufficient to change the overall trend of global liquidity.

The Federal Reserve’s New Chair Won’t Change Policy Fundamentals

Regarding the upcoming change in the Federal Reserve chair, Hayes presents a core view: The president ultimately always gets the monetary policy they want. Historically, the power struggle between U.S. presidents and Fed chairs is nothing new—from Johnson’s era demanding rate cuts to current political pressure—the essence has never changed.

The key point: no matter who sits in that position, once in office, they realize they are working for the president. Trump has explicitly supported low interest rates, loose liquidity, and hotter markets. Whoever becomes Fed chair, to win the next election, they will adopt similar policies. Hayes emphasizes: “Who sits in that position doesn’t matter much to me.”

The Stock Market Is the U.S. Economy; AI Wave Must Continue

Hayes delves into the contradiction between liquidity and inflation. In the highly financialized U.S. economy, the stock market is essentially the economy itself. Therefore, authorities will strive to keep stocks rising—meaning the AI narrative must persist.

Although skepticism about the AI bubble has grown, Hayes believes most investors are mistaken about the direction. Short positions on the S&P 500 and tech giants like Nvidia carry enormous risk because this bubble has not burst yet, and policymakers need it to continue. Trump has bet the entire U.S. economy on AI success, and the only way to achieve this is through more debt, lower financing costs, and looser monetary supply.

Rebranded QE: Reserve Management Purchase Program

Politicians face a dilemma: how to explain to voters that loose policies won’t cause inflation? The answer is simple—renaming it.

Quantitative easing (QE) has a bad reputation because people associate it with money printing and inflation. So, this round has been given a new name—Reserve Management Purchase (RMP). Hayes consulted several macroeconomists; most technical analysts claim this isn’t technically QE. But Hayes believes that, despite technical distinctions, in substance, it is a variant of QE.

The Federal Reserve is buying short-term Treasuries, guiding money market funds to provide more loans in the repo market, directly financing the U.S. Treasury. This is a clever system—using the money and repo markets as intermediaries to finance the short end of the Treasury yield curve.

History repeats: when Bernanke launched QE in 2008-2009, the market didn’t believe it either. The S&P 500 continued to fall until March 2009 before bottoming out. Bernanke insisted it was just “temporary balance sheet expansion” that would be scaled back later. But successive rounds of QE followed until 2021, when it truly ended, coinciding with the market top. Today’s RMP is undergoing the same process—markets haven’t fully realized it yet, but eventually they’ll understand “this is just money printing.”

Timeline: Clear Improvement in January, Turning Point in March

Hayes provides specific expectations for the market bottom and rebound. Starting from January next year, asset prices should see a significant improvement. But by March, markets will start to worry that this ‘temporary project’ might end, causing volatility. Once RMP is confirmed to continue, markets will restart their upward trend.

Current Investment Deployment: 90% of Capital Used

Regarding his own investment strategy, Hayes reveals details about Maelstrom (his family office). The team has deployed about 90% of available capital, keeping only a small portion of liquidity for market volatility. Since they do not use leverage, even if Bitcoin drops below $80,000 in the short term, it won’t pose a threat.

The current BTC price hovers around $90,690, which remains a favorable position within Hayes’s investment framework.

Alternative Coins: Hidden Gems in Privacy and Zero-Knowledge Proofs

Beyond Bitcoin, Hayes’s favorite alternative coins have shifted. In this cycle, Ethena (ENA) has been the standout project—early involvement as a financial advisor. He believes the next cycle’s focus will shift to privacy and zero-knowledge proofs (ZK).

Zcash (ZEC) has established good exposure, but Hayes believes this sector will produce truly explosive projects, potentially becoming the best altcoins in the next two to three years. He expects to find the “breakout” project by 2026—who it will be is unknown, but as an investor, your job is to keep searching for opportunities.

Hyperliquid (HYPE) and Ethena (ENA) are Hayes’s two most profitable positions this year. ENA is especially important—it’s a rate-based trading tool. As the Fed cuts rates, the RMP narrative advances, and Bitcoin strengthens, users will be more willing to leverage and pay higher premiums. Hayes is very confident in ENA’s upside potential, expecting it to surge quickly, similar to September 2024, with ENA likely to rise sharply.

The Essence of Privacy Value and Government Responses

Regarding the core value of privacy coins, Hayes points out an interesting paradox. He emphasizes that he controls what others can see—on-chain wallet trackers often show data that isn’t the full truth, requiring selective trust.

The real value proposition of privacy coins is: in a world where governments and competitors want to monitor you, do I truly have a way to ensure privacy? This potential fear can be exploited. Even if by 2026 the hottest altcoin turns out to be trash, there will still be huge profit opportunities before then.

Government responses are evolving. Hayes shares his personal experience with buying Zcash—when he tried to inquire about multi-million dollar trades, only 2 out of 8 brokers were willing to quote, while the other 6 couldn’t trade privacy coins due to regulations. Now, governments are not outright banning but indirectly blocking by preventing exchanges from listing these coins—making access extremely difficult.

The Possibility of Wrong Predictions

Hayes openly admits the risks in his forecasts. Some may question: if you say they will print money, why did Bitcoin fall from $125,000 to $80,000? His blunt answer: “You’re right.”

He discusses a future scenario—it’s about the process of market gradually accepting the new term RMP. But perceptions can change, and that’s the risk I take. The market will give the answer. I might be wrong, but I have bet real money on this thesis. Investors will see the final outcome.

Altcoin Season: Courage and Public Opinion Game

Regarding whether an altcoin season will arrive, Hayes offers a sharp critique. People tend to selectively forget past altcoin seasons—full of “knew it” and “if only” assumptions.

In 2016-2017, just releasing absurd PDFs and payment addresses could raise funds; most didn’t participate but many made huge profits. During the NFT craze of 2020-2021, people traded all kinds of ugly animals—did you participate? Hayes bluntly states: altcoin seasons have always existed; you’re just too timid. What you want is a “familiar” altcoin season, but every cycle, new things emerge.

Only by changing your mindset can you keep up; otherwise, you’ll just lament missing out but refuse to buy what’s rising. The 2025 Hyperliquid, Ethena, and others are living proof.

Personal Trading Reflection

Hayes reviews his trading record this year and finds an interesting paradox: overall profitable, but only about one in five trades are winners. Most operations resulted in losses, and he admits wasting money on shitcoins and meme coins—garbage he shouldn’t have touched.

Real profits come from capturing big trends—like Hyperliquid and Ethena. Having enough capital to heavily invest in key projects is the winning formula. ENA especially embodies Hayes’s macro thesis—it’s not just a coin but a tool for earning interest rate differentials. Although he sees large USDe redemptions now, Hayes expects this trend to reverse, just like in September 2024, when ENA will surge rapidly.

Quick Judgment Collection

In a series of rapid-fire questions, Hayes states his core positions:

Bitcoin by the end of 2026: Higher. Target price $250,000. (His original 2025 target has already missed, but he maintains the same goal, just pushed back in time.)

Most risky trade: Short Nvidia. This is almost a consensus market trap.

Largest macro risk: Central bank tightening. This is the ultimate factor crushing the crypto market.

Best signal for liquidity return: Deep research into central bank and banking system balance sheets. The signals will never be straightforward because they want to deceive you.

View on Ethereum: The king of settlement layers. Concise and powerful.

Underrated risk: Leverage. Most participants overlook the threat of systemic leverage liquidations.

Most important misconception to eliminate in market psychology: The idea that markets manipulate your prices behind the scenes. This is a widespread but often unfounded conspiracy theory.

Hayes ends with a playful cryptic message: if someone wants to see his “hidden” wallets, they need to use their imagination—implying that true privacy protection requires a combination of creativity and technical means.