How Arthur Hayes and BitMEX influence Bitcoin price movements

Arthur Hayes and the liquidity rebound

Arthur Hayes predicts Bitcoin reaches $126,000 by December 31. He calls this price target a "foregone conclusion." This prediction requires a 46% gain from the $86,050 price recorded on October 6. He links this to increased money printing by central banks. He views the Federal Reserve’s Reserve Management Purchases as a form of quantitative easing. These purchases expand the Fed’s balance sheet by at least $40 billion every month. Hayes expects a 2026 liquidity rebound. He anticipates a three-pillar scenario to drive this move. The first pillar is the Fed’s balance sheet expansion. The second pillar involves commercial bank lending into strategic industries. The third pillar involves $200 billion in mortgage-backed securities purchases by Fannie Mae and Freddie Mac. This third pillar could lower mortgage rates and create a wealth effect. Hayes expects a 2026 liquidity turn after the underperformance of 2025. He believes Bitcoin will outperform once the market realizes the Fed is expanding the money supply. He is also long Strategy and Metaplanet to gain levered exposure. He believes these companies can outperform Bitcoin on the upside if it retakes $110,000. He describes his approach as a "degen" strategy. He is also adding to his Zcash position. He sees Bitcoin as a warning signal for fiat credit conditions. He believes that once the market realizes the Federal Reserve is expanding the money supply, Bitcoin will climb toward $124,000 and move toward $200,000.

Whale movements and the May liquidation event

A major Bitcoin whale moved 40,192 BTC, worth $4.75 billion, to Galaxy Digital after 14 years of inactivity. This entity moved the funds in batches following earlier transfers of 80,000 BTC in July. Another whale closed a 1,105 BTC position at a loss of $26.9 million. This trader withdrew the Bitcoin from Binance and OKX between November and February at an average cost of $87,181. I find these massive movements from long-term holders to be a clear indicator of a shifting market regime. The market also experienced a massive liquidation event on May 30 when US strikes near the Strait of Hormuz sent Bitcoin below $74,000. This event triggered nearly $1 billion in crypto futures liquidations in 24 hours. Long positions made up 93% of those liquidations. Spot Bitcoin ETFs saw $2.8 billion pulled from them over nine consecutive sessions following the strikes. The price sat near $73,800 after the drop. Other large holders also moved significant funds recently. In November, a billionaire offloaded a $1.3 billion stash after 14 years. A Satoshi-era wallet moved $180 million to Coinbase. A 13-year dormant wallet moved 2,100 BTC. A specific whale address moved 300 BTC to Binance on Tuesday. This transfer represents a potential loss of $15 million if the price remains near $67,853. Speculation regarding the whale’s identity includes Roger Ver or even Satoshi Nakamoto. Coinbase Director Conor Grogan suggested the entity is likely an early miner from the 2011 era. This miner would have operated when the block subsidy was 50 BTC per block.

The Deribit October concentration

Deribit faces a massive concentration of open interest scheduled to expire on October 30. About 35% of all Bitcoin options open interest on the platform is tied to this single date. The notional value of these contracts is between $10.7 billion and $11.3 billion. The single largest strike concentration is the $95,000 call, which holds 24,000 BTC of open interest. This strike represents $2.1 billion in notional value.

The put-to-call ratio for this expiry is between 0.4 and 0.51. This means there are roughly two calls for every put. The max-pain level is $78,000 to $79,000. Because Bitcoin trades near $86,000, the price is well above the max-pain zone. The massive concentration of 24,000 BTC in calls at the $95,000 strike represents $2.1 billion in notional value that could force significant market maker activity if the price approaches that level. I view the current Deribit concentration as a volatility trap for those expecting a smooth climb. You already know that liquidity drives these cycles, so I will focus on the specific shifts in market structure. I also see growing competition from IBIT. IBIT options show a long-dated call footprint with horizons of six months to over a year. Deribit’s volume stays between $3 billion and $4 billion daily, while IBIT’s volume stays between $2 billion and $3 billion daily.

BitMEX legacy and market mechanics

Kuan, a hedge fund manager, traces the importance of crypto derivatives to BitMEX. The exchange pioneered perpetual swaps to solve liquidity fragmentation. These contracts have no expiration date and use funding rates to keep prices near spot. Kuan notes that BitMEX’s order book depth once reached millions of dollars. He also recalls the March 12, 2020 crash. During that period, the platform went offline. This outage interrupted a cascade of liquidations. The Bitcoin price stabilized at $3,800 during that period. I think the interruption of that liquidation cascade prevented the price from falling even further. Inverse contracts were the main driver of liquidations then. These contracts use Bitcoin as collateral. When the price falls, long positions face three pressures: losses on the position, a decline in collateral value, and the increasing share of losses against remaining collateral. This nonlinear structure creates the cascading liquidations seen in many markets. BitMEX is based in Seychelles and uses KDB+ for its trading engine. US traders must use a VPN to access the platform. The industry has seen many platforms attempt to copy the BitMEX model. Platforms like Bybit shifted toward USDT-margined trading and a super-app model. BitMEX relies on AWS for cloud security and provides PGP encryption for all automated emails. Deribit is based in Amsterdam and has become a leader in the opposition.