"He said that in Q1, the market experienced a quiet credit squeeze. Most tech and services companies adopted AI agents, which led to many employees losing their jobs. Incomes weakened, and people's borrowing power dropped, restricting how money flows around. In that environment, Bitcoin struggled, falling about 22% in the quarter."
"However, Hayes believes that the conditions are shifting in Q2. U.S. defense spending is on the rise due to the recent Middle East conflict, and Hayes believes this increases borrowing needs, adds liquidity, and supports risk assets like Bitcoin. Hayes expects money to flow into the financial system and that extra liquidity could push Bitcoin above $125,000 by the end of 2026."
"SoSoValue data shows that U.S. Spot Bitcoin ETFs recorded positive inflows of $1.32 billion and $1.97 billion in March and April. The first five days in May have already seen $1.63 billion in inflows, representing a daily inflow average of over $500 million. If inflows maintain a consistent run above $300 million daily, it would give Bitcoin the institutional edge to break above $90,000-about 14% upside from current levels."
"But if inflows slow down to just over $100 million or outflows dominate the market-like the four months of consecutive outflows between November 2025 and February 2026-Bitcoin could fall to around $75,000. And that would extend its timeli"
Bitcoin fell about 22% in the first quarter amid a quiet credit squeeze as AI adoption reduced employment, weakened incomes, and lowered borrowing power, restricting money flow. Conditions are expected to shift in the second quarter as rising U.S. defense spending tied to the Middle East conflict increases borrowing needs, adds liquidity, and supports risk assets like Bitcoin. Spot Bitcoin ETFs have shown positive inflows, with large monthly and early-May totals indicating strong institutional demand. Sustained daily inflows above roughly $300 million could help Bitcoin break above $90,000 and then grow about 40% toward $125,000. Slower inflows or dominant outflows could instead push Bitcoin toward about $75,000.
#bitcoin-price-forecast #liquidity-and-credit-conditions #spot-bitcoin-etfs #institutional-inflows #macroeconomic-catalysts
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