Here’s the real reason the 4-year Bitcoin cycle is dead: Arthur Hayes
News Summary
BitMEX co-founder Arthur Hayes contends that the four-year crypto cycle is dead, attributing its demise not to halving events or institutional interest as commonly believed, but to global monetary supply and liquidity conditions, particularly the USD and Chinese yuan. He asserts that past cycles concluded when monetary conditions tightened, not due to arbitrary timing. Hayes explains that the current cycle is distinct for several reasons, including the US Treasury injecting $2.5 trillion into markets from the Fed's Reverse Repo program by issuing more bills, and President Donald Trump's push for easier monetary policy to grow out of debt. Furthermore, the Federal Reserve has resumed rate cuts despite inflation exceeding its target, with two more cuts anticipated this year. He emphasizes that Bitcoin's bull and bear markets are intrinsically linked to Federal Reserve quantitative easing and Chinese credit expansion, arguing that China will adopt at least a neutral or mildly supportive monetary policy to end deflation, thereby removing a major impediment to US monetary expansion driving Bitcoin higher.
Background
The concept of a 'four-year Bitcoin cycle' is widely circulated within the cryptocurrency community, typically linked to the quadrennial block reward halving events. Many investors and analysts have historically used this pattern to forecast bull and bear markets, believing that halving reduces supply and thus drives prices up. However, prominent figures in the crypto space, such as Arthur Hayes, challenge this view, positing that macro monetary policy is a more fundamental driver of Bitcoin's price movements. Under incumbent US President Donald Trump, the current US government and Federal Reserve policies are leaning towards stimulating economic growth and managing debt through easier monetary conditions, which stands in stark contrast to the traditional four-year cycle narrative.
In-Depth AI Insights
How will Hayes's critique of the four-year cycle reshape crypto investors' risk assessment and strategy? - Hayes's emphasis on macro monetary policy over halving events as the primary driver of Bitcoin cycles demands that investors shift their focus from rigid timeframes to global central bank liquidity management and interest rate policies. - Investors will need to analyze the policy directions, inflation targets, and quantitative easing/tightening measures of major central banks like the Fed and the People's Bank of China more deeply, using them as core indicators for market trends rather than simply relying on historical cycle patterns. - This shift implies that investment risk is no longer solely driven by technicals or market sentiment but is more profoundly linked to global economic cycles, geopolitics, and major economies' fiscal and monetary policy decisions, increasing the weight of macroeconomic analysis in crypto investing. How will President Donald Trump's