TLDR
- Arthur Hayes says Bitcoin’s price now depends on global monetary conditions.
- Hayes claims the four-year Bitcoin cycle is obsolete due to liquidity growth.
- U.S. and China’s monetary easing will likely keep Bitcoin’s price rising.
- Bitcoin’s price cycles are now shaped by fiat money supply, not halving events.
Arthur Hayes, co-founder of BitMEX, has declared that the traditional four-year Bitcoin market cycle is no longer relevant. While many traders still rely on the historical pattern tied to Bitcoin’s halving events, Hayes argues that changes in global monetary policy and liquidity conditions make the cycle obsolete. Instead of following a predictable pattern, Bitcoin’s price movements are now influenced more by broader economic factors, especially fiat money supply.
The Shift Away From the Four-Year Cycle
The four-year cycle has been a cornerstone for many Bitcoin traders. Historically, the cycle saw Bitcoin’s price rising after each halving event, followed by a significant downturn. However, Hayes explains that this pattern no longer applies due to shifts in global monetary policies.
He emphasized that the main driver of Bitcoin’s price cycles has always been the amount of money circulating in the global economy. Past cycles were closely tied to changes in monetary policy, particularly in the U.S. and China.
“Monetary conditions tightened, and that’s when Bitcoin’s price would drop,” Hayes said. Now, he suggests that the ongoing bull market is likely to continue due to supportive monetary policies across major economies.
Global Monetary Policy and Its Effect on Bitcoin
Hayes points out that the U.S. and China are both pursuing policies that favor more liquidity. The U.S. government’s actions, such as draining $2.5 trillion from the Federal Reserve’s Reverse Repo program, have increased the supply of money in the economy.
This move has allowed liquidity to remain high, which is essential for Bitcoin’s continued price growth. Hayes also noted that the U.S. Federal Reserve’s plan to cut interest rates further supports this outlook.
In addition, Hayes draws attention to China’s role in global monetary policy. Although China’s influence on Bitcoin has been less pronounced recently, the country is shifting from a deflationary stance to one that is more supportive of economic growth. This change reduces the risk of deflationary pressures that could hinder Bitcoin’s upward trajectory, he added.
The Role of U.S. and Chinese Governments
The actions of the U.S. and Chinese governments are crucial in determining the future of Bitcoin’s price. According to Hayes, both nations are likely to maintain or increase monetary easing in the near future. “Money shall be cheaper and more plentiful,” he said, signaling that both U.S. and Chinese policies are aligned to support continued economic expansion.
The Federal Reserve’s recent rate cuts are indicative of the broader trend of easing monetary conditions. Hayes also referenced U.S. President Donald Trump’s stance on growing the economy and lowering housing costs, which could lead to more money being pumped into the market. These factors, according to Hayes, set the stage for Bitcoin’s price to continue rising, regardless of the halving cycle.
A New Era for Bitcoin’s Price Cycles
As Hayes pointed out, previous Bitcoin bear markets were linked to tightening monetary conditions, particularly in the U.S. and China. However, the current cycle is different. With both countries easing their policies, Hayes believes that Bitcoin will continue to rise. While the halving events may still have an impact on Bitcoin’s supply, the overall market dynamics are now shaped by broader economic factors.
With expectations of further monetary easing in the U.S. and China, Bitcoin may not face the traditional bear market that followed previous bull runs. This shift signals the end of the four-year cycle, as Bitcoin’s price is now more dependent on global liquidity than on any specific event or timeline. As Hayes concludes, the future of Bitcoin seems tied to the ongoing expansion of fiat money, which will continue to drive its value higher.
