BitMEX co-founder Arthur Hayes expects the Bitcoin price to return to $126,000 by the end of 2026. He links his forecast to rising United States debt and the possibility of additional dollar liquidity, although the policy changes that would be required have not yet taken place.

Hayes outlined the view in a recent Altcoin Daily interview. He said pressure in government bond markets could eventually lead the authorities to add liquidity.

The $126,000 target would place Bitcoin near its October 2025 record. Hayes also backed that level in May, after arguing that BTC had bottomed near $60,000.

JUST IN: BILLIONAIRE ARTHUR HAYES JUST SAID HE EXPECTS #BITCOIN TO GO ABSOLUTELY PARABOLIC SOON "THE PRICE OF BTC IS GOING TO BE IN THE HUNDREDS OF THOUSANDS VERY QUICKLY" "IF PEOPLE ARE WORRIED THAT YIELD CURVE CONTROL IS COMING" "THIS IS THE EXACT MOMENT YOU WANNA OWN BTC"… pic.twitter.com/doyyGcAXk8 — The Bitcoin Historian (@pete_rizzo_) August 24, 2026

US gross federal debt reached $40.047 trillion on August 18. The total included $32.266 trillion held by the public and $7.782 trillion in intragovernmental holdings. Federal interest costs have also risen sharply.

Why Does Hayes Expect the Bitcoin Price to Reach $126K?

Hayes explains that high borrowings and high interest costs have led to higher Treasury rates, which are more difficult to maintain. If stress continues in the markets, the Treasury may respond, he said.

A Treasury statement dated August 19 addressed long-end liquidity-support buybacks, which will be doubled from a $2 billion maximum per transaction to $4 billion per operation. This increase will apply to 10- to 30-year securities from September 9 to November 4.

These buybacks seek to enhance liquidity in longer-dated Treasury securities. They are debt-management operations rather than Federal Reserve quantitative easing, and there is nothing in the announcement about monetary stimulus.

Bitcoin has increased in value following the Treasury announcement. Yields fell, and a short squeeze contributed to the rally. Still, the coincidence of timing does not make the buyback decision the reason for the move.

How Could FIMA Influence the Bitcoin Price?

Hayes also brought up the Foreign and International Monetary Authorities Repo facility run by the Federal Reserve. It permits approved foreign central banks and international accounts to swap Treasury securities for dollars.

The standing facility has a daily limit of $60 billion per counterparty. The Federal Reserve says it offers approved foreign account holders an alternative to selling Treasury securities in the open market, an arrangement that can support the smooth functioning of the US Treasury market.

Hayes said removing or raising FIMA's counterparty limit could release more dollar liquidity into financial markets and support Bitcoin. However, the Federal Reserve has not announced any change to the facility.

FIMA deals involve temporary, collateralized repo loans. They do not buy any Bitcoin, nor do they promise to provide funds for crypto markets. The benefit to Bitcoin is therefore Hayes' theory and not an actual occurrence.

Hypothetical Scenarios Discussed in the Interview

The host introduced a hypothetical Bitcoin price drop to $35,000. Hayes discussed a possible cause but did not forecast the decline. According to Hayes, forced selling by Strategy would spark a capitulation event, one he sees as similar to the March 2020 crash. The host could have an easy time buying Bitcoin afterwards if authorities loosen monetary conditions.

The interview then considered a rapid Bitcoin move to $120,000. Hayes said removing FIMA's counterparty limit could trigger that rise, and he added that the Bitcoin price could then move toward $500,000. That $500,000 is a conditional scenario, not a year-end price target by Hayes. His forecast still stands at $126,000.