Bitcoin’s Liquidity-Led Trajectory: Navigating Short-Term Pressures Toward Long-Term Strength

In a detailed analysis, BitMEX co-founder Arthur Hayes presents a compelling narrative that reframes Bitcoin's recent price correction as a symptom of broader macroeconomic shifts rather than a failure of its underlying fundamentals. Hayes observes that Bitcoin's dip below the $90,000 mark is primarily driven by tightening U.S. dollar liquidity, a condition that affects global risk assets. He identifies specific mechanistic pressures within the crypto ecosystem that have exacerbated the sell-off, including the unwinding of ETF arbitrage positions and strategic sell-offs from digital asset treasuries seeking liquidity. These combined forces, Hayes suggests, could temporarily push Bitcoin into the $80,000 to $85,000 range. Crucially, he positions Bitcoin not merely as a speculative asset but as a sophisticated barometer for global fiat liquidity conditions. His analysis notes a current stall in institutional inflows, which he interprets as a pause in the popular "basis trade"—a strategy that thrives in high-liquidity environments. This perspective shifts the focus from Bitcoin's intrinsic value to its role as a leading indicator of monetary policy effectiveness and capital market fluidity. For long-term investors, Hayes's view implies that the current weakness is a cyclical phenomenon tied to the ebb and flow of dollar strength. The anticipated rally he foresees is predicated on expected shifts in fiscal and monetary policy aimed at re-liquefying markets. As of late December 2025, this analysis provides a framework for understanding volatility not as a threat, but as a predictable phase within Bitcoin's maturation as a macro asset, setting the stage for its next significant upward move when liquidity conditions inevitably reverse.

Arthur Hayes Foresees Bitcoin Rally Amid Fiscal Policy Shifts

BitMEX co-founder Arthur Hayes argues Bitcoin's recent dip below $90,000 reflects tightening dollar liquidity rather than deteriorating fundamentals. ETF arbitrage unwinds and digital asset treasury sell-offs have exacerbated downward pressure, potentially pushing BTC toward $80,000-$85,000 temporarily.

Hayes positions bitcoin as a barometer of global fiat liquidity, noting stalled institutional inflows as basis trade opportunities vanish. "Institutions weren't believers—they were yield chasers," he observes, marking the end of an era where crypto returns outpaced risk-free rates.

The catalyst for resurgence? Hayes anticipates massive monetary expansion following a U.S. equities correction, projecting Bitcoin could reach $200,000-$250,000 by year-end. This aligns with his longstanding thesis that cryptocurrency markets thrive when central banks flood systems with liquidity.

Kindly MD (NAKA) Stock Plummets Amid Merger Accounting Delays and Crypto Losses

Kindly MD, trading as NAKA, saw its shares tumble 7-10% to $0.55-$0.57 after disclosing a delay in its Q3 earnings filing. The healthcare-turned-Bitcoin treasury company attributed the postponement to complexities in accounting for its August merger with Nakamoto Holdings. Preliminary figures reveal a $59 million loss on the acquisition, alongside $22.07 million in unrealized crypto losses and $1.41 million in realized losses from digital asset sales.

The stock's 95% decline over six months reflects mounting investor skepticism. Despite holding 5,765 BTC—ranking as the 19th largest corporate bitcoin treasury—NAKA's financial missteps have eroded confidence. The SEC filing underscores the challenges of applying GAAP standards to crypto-heavy balance sheets.

Mt. Gox Moves Nearly $1B in Bitcoin – Is Another Repayment Wave Coming?

The defunct Mt. Gox exchange reignited market speculation after transferring 10,600 BTC (worth approximately $1 billion) to an unidentified wallet. Arkham Intelligence flagged the late Monday movement, which included 10,422 BTC sent to a new address and a smaller amount returned to a Mt. Gox-controlled hot wallet.

While such transfers have historically preceded creditor repayments, the latest activity offers no definitive timeline. The exchange’s decade-long saga—stemming from its 2014 collapse after losing 850,000 BTC to hackers—resumed partial distributions in mid-2024 using remaining assets: 142,000 BTC, equivalent Bitcoin Cash holdings, and billions in yen.

Market participants remain wary. Past repayment cycles have been protracted and erratic, leaving traders to weigh the potential impact of sudden supply injections against Bitcoin’s fragile liquidity.

El Salvador Doubles Down on Bitcoin Strategy with $100M Purchase Amid Market Dip

El Salvador has executed its largest single-day Bitcoin acquisition to date, purchasing 1,090 BTC worth approximately $100 million as prices plunged to multi-month lows. The MOVE defies both market sentiment and IMF stipulations, reinforcing President Nayib Bukele's unshaken commitment to national Bitcoin accumulation.

The Central American nation's reserves now hold 7,474 BTC ($676 million), with Monday's strategic buy occurring when Bitcoin briefly dipped below $90,000—a level unseen since April. This follows El Salvador's consistent '1 BTC per day' accumulation strategy initiated in November 2022, demonstrating calculated dollar-cost averaging during volatility.

Controversy emerges as the purchase contradicts terms of the country's $1.4 billion IMF agreement prohibiting public sector Bitcoin acquisitions. Government officials had previously claimed no BTC purchases occurred since February, raising questions about fiscal transparency.

Bitcoin's Decline Against Gold Sparks Debate Over 'Digital Gold' Narrative

Bitcoin's recent drop below $90,000 has intensified market anxiety, with critics like Peter Schiff seizing the moment to challenge its 'digital gold' narrative. Schiff highlights a 40% decline in Bitcoin's value when priced in gold, arguing this undermines its purported role as a stable store of value.

Gold's resilience above $4,000 contrasts sharply with Bitcoin's volatility, fueling skepticism. Yet defenders counter that Bitcoin's scarcity and censorship resistance remain intact—qualities that define its long-term value proposition, irrespective of short-term price swings.

The debate exposes a fundamental divide: traditionalists view gold's stability as superior, while crypto advocates see Bitcoin's volatility as the price of technological disruption. Market reactions suggest both narratives will face renewed scrutiny as macro conditions evolve.

Cryptocurrency Market Faces Intense Volatility Surge

Bitcoin's price swung below $90,000 before reclaiming the threshold, underscoring the market's fragility. The cryptocurrency sector has shed $1.1 trillion in value over 40 days, averaging $27 billion in daily losses. Leverage-induced liquidations exacerbated the downturn, with October 10 alone seeing $20 billion wiped out—a day that coincided with Bitcoin's $20,000 plunge.

Institutional exits accelerated in mid-to-late October, amplifying volatility. The relationship between leverage and spot prices remains a critical vulnerability. Short squeezes, once a hallmark of bull markets, have reversed into cascading liquidations, with four days in the past two weeks exceeding $19 billion in combined losses.