Arthur Hayes Predicts Bitcoin Peak by March 2025, Followed by Market Crash
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Arthur Hayes, co-founder of BitMEX, thinks Bitcoin and the broader crypto market will rally into early 2025 with prices potentially new highs by March.
His prediction is based on pro-business policies and liquidity coming in after Trump’s presidency. Hayes believes these dynamics plus the Fed’s QT will make the crypto market especially Bitcoin optimistic.
By Q1 2025 Hayes expects a big liquidity boost, he thinks the US Treasury will put in over $600bn into the market, much needed for Bitcoin and other crypto assets. This liquidity will come from the debt ceiling issue being resolved under Trump’s administration.
But Hayes warns this rally won’t last. The liquidity driven bullish phase will end as the tightening conditions and reduced fiscal and monetary support kicks in. The market may correct as early as mid 2025 and end the current up move.
U.S. Dollar Liquidity Dynamics to Drive Crypto Prices
One of the key drivers of Hayes’ prediction is the expected change in U.S. dollar liquidity. He compares it to 2022 when the Federal Reserve’s Reverse Repo Facility (RRP) caused a liquidity injection that coincided with Bitcoin’s bottom. The Fed will continue its $60bn per month QT until mid 2025 and Hayes expects financial liquidity to reduce by Q1 2025.
Despite the tightening Hayes thinks other sources of liquidity will offset the impact. He points to the General Treasury Account (TGA) and how it funds the U.S. government through spending not debt. This will be a big support for the market and boost Bitcoin’s price before the mid year correction.
The Expected Market Correction and DeSci Shift Post-Q1 2025
After the Q1 2025 rally Hayes thinks the market will correct, fiscal and monetary support will wane. He points to tax season as a contributor, tax payments in mid-April will drain the TGA and cause a liquidity squeeze. This will hurt investor sentiment and cause a downturn similar to Bitcoin’s correction in mid 2024.
For investors Hayes advises to focus on Q1 2025 for gains and prepare for a more conservative outlook after March. In line with his market strategy Maelstrom is shifting its focus to emerging DeSci projects. The firm will invest in tokens like BIO, VITA and NEURON.
Key Takeaways:
Bitcoin Surge: Bitcoin is expected to peak in Q1 2025, fueled by liquidity from Trump’s pro-business policies and Treasury actions.
Liquidity Impact: U.S. dollar liquidity will provide significant support for Bitcoin until mid-2025, but tightening will lead to a correction.
Market Correction: After March 2025, a pullback is likely as fiscal and monetary support fades, with tax season exacerbating liquidity issues.
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