Former BitMEX CEO Arthur Hayes published an essay titled "Frowny Cloud" examining how dollar liquidity shapes bitcoin, gold, and US equities in the present macro cycle.

Core argument

Hayes links asset performance to the availability of dollar liquidity, arguing that flows and policy choices determine relative returns across asset classes.

Why bitcoin lagged in 2025

He attributes bitcoin’s underperformance in 2025 to a shortage of liquidity compared with other markets that benefited from targeted demand and support mechanisms.

Hayes notes that gold advanced largely because of active central bank purchases, which created sustained buying pressure in that market.

He also says US equities, particularly the Nasdaq, were supported by substantial government backing for the artificial intelligence sector despite tight monetary conditions.

Conditions that could reverse the trend

According to Hayes, two developments could restore interest in bitcoin: an expansion of the Federal Reserve balance sheet and a pick-up in bank lending activity.

He suggests that such developments would increase dollar issuance and liquidity, potentially reigniting capital flows back into crypto assets including BTC.

Summary

The essay frames recent asset dynamics as a function of liquidity allocation and policy signals, outlining specific scenarios that might shift capital between gold, equities, and bitcoin.