BitMEX co-founder Arthur Hayes, in his latest article "The Butterfly Touch," stated that the cryptocurrency bull market was officially launched following the U.S. military strike on Iran on February 28, 2026. Bitcoin, which hit a low of $60,000 earlier this year, is "inevitable" to rebound to $126,000, driven by the imminent release of trillions in U.S. dollar and renminbi liquidity, and he expects the rally to accelerate sharply after breaking above $90,000. Hayes identified three structural factors that will drive unchecked expansion of fiat credit: • The AI capital expenditure race: The U.S. and China view dominance in AI as central to national security, forcing the Federal Reserve and the People’s Bank of China to ease financial conditions to support the massive CAPEX of tech giants; combined with the "Jevons Paradox" and the "Red Queen Effect," AI spending will grow exponentially. • War-driven inflation: The U.S.-Iran conflict has exposed global supply chains’ dependence on U.S. hegemony, prompting sovereign nations to gradually divest from dollar-denominated assets in favor of infrastructure, defense, and commodity reserves, compelling the U.S. to maintain market stability through dollar swap lines and relaxed banking regulations (such as eSLR). • Political will: Ahead of the 2028 U.S. election, the Trump administration must sustain its electoral prospects through loose credit, simultaneously advancing the "Drill, baby, drill" policy and pushing the S&P 500 toward 10,000 points. Hayes
Arthur Hayes Predicts Bitcoin to Reach $126,000 Amid AI and War-Driven Inflation
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Summary
Arthur Hayes cites inflation data as a key driver in his forecast that Bitcoin will reach $126,000 by 2026. In his article "The Butterfly Touch," he connects the onset of the bull market to a U.S. strike on Iran and increased liquidity from AI spending by the U.S. and China. War-driven inflation and political pressures leading up to the 2028 U.S. election also influence his outlook. He notes that the Fear & Greed Index is shifting toward optimism amid these macro trends.
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