BitMEX co-founder Arthur Hayes says the April 1 rollback of the enhanced supplemental leverage ratio is the most consequential banking reform in years, freeing the largest US banks to expand balance sheets by what he estimates will be "high single-digit trillion" dollars in new credit capacity over the next several years. He argues the capacity is being routed to defense, mining, and nuclear — a wartime-economy lending push that the Trump administration needs because the banking system, constrained since the post-2021 re-imposition of Basel III capital charges, has been unable to absorb the roughly $10 trillion of US debt maturing in the next year.
Why it matters
Hayes frames the ESLR as a quiet shift in how credit gets created — out of the central bank, back into the commercial banking system. With the Fed's balance sheet still expanding, a paper by Fed Governor Stephen Miran on shrinking it, and Bessent and Warsh publicly arguing for a smaller Fed footprint, the banking system is being deregulated into the role of primary credit creator. That re-monetization is what he says will overwhelm AI-driven deflationary forces in the medium term. He is openly long Bitcoin, gold, Hyperliquid (HYPE), and Zcash, and told the audience he sees a path to $1 million per Bitcoin by 2030 — with the caveat that position sizing matters more than the price target.
Market impact
Hayes's central call is that Bitcoin has already bottomed around $60,000 and that the slow build higher resumes once the Iran-driven risk premium fades. He is more constructive on BTC than ETH this cycle, pointing out that Ethereum has barely retested its prior all-time high while Bitcoin has roughly doubled off its cycle low, and he reads the divergence as ETH's L2 activity not flowing back to the base layer. On altcoins, his filter is ruthlessly mechanical: real users, real revenue, real buybacks — projects that meet that bar (his HYPE thesis) can run even in a bear market, where he sees $150 as a realistic floor and "close to a thousand" in a true melt-up if Bitcoin pushes past $250,000. He warned the same credit engine that powers the next leg higher also sets up a Great Depression-style unwind risk if the 2028 US election brings a challenger who campaigns on rolling back the wartime-credit regime.
Frequently asked questions
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What is the ESLR and why does Arthur Hayes think it matters for crypto?
The Enhanced Supplemental Leverage Ratio was re-imposed after COVID and forced big US banks to hold extra capital against Treasuries. Hayes says the April 1 rollback frees up high single-digit trillions in lending capacity, routing credit to defense, mining, and nuclear — a wartime-economy push that will eventually…
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Where does Arthur Hayes think Bitcoin has bottomed?
Hayes says Bitcoin has likely bottomed around $60,000, with the next leg up framed as a slow build rather than a vertical move. He pegged his longer-term 2030 target at $1 million per BTC, contingent on the credit-creation thesis holding.
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Why is Hayes more bullish on Bitcoin than Ethereum this cycle?
He points out Bitcoin has roughly doubled off its cycle low while ETH has barely retested its prior all-time high. He reads the divergence as Ethereum L2 activity not flowing back to the base layer, making BTC the cleaner vehicle for a liquidity expansion trade.
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What is Hayes's filter for picking altcoins?
Three mechanical tests: real users, real revenue, and real buybacks. Hyperliquid (HYPE) clears all three in his view, which is why he sees $150 as a floor in a bear market and close to $1,000 in a true melt-up if Bitcoin pushes past $250,000.
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What is the bear-case risk Hayes flagged for this credit cycle?
The same banking deregulation that powers the rally sets up a Great Depression-style unwind if a 2028 US election challenger campaigns on rolling back the wartime-credit regime. He says once voters and markets lose confidence in continued credit expansion, credit-sensitive assets — which is basically everything — will…
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