Arthur Hayes, co-founder of BitMEX, has projected that Bitcoin could reach $125,000, driven by a shift in market narrative from 'AI deflation' to 'wartime inflation.' Speaking at the "Bitcoin 2026" conference, Hayes highlighted the impact of the Israel-Iran conflict on inflation expectations and credit expansion. He emphasized that improved banking system liquidity is counteracting credit contraction linked to AI developments. Hayes also pointed out that his liquidity indicators, which bottomed out last November, have been aligning with Bitcoin's price movements.