Historically, the price of bitcoin has repeated a pattern, but — according to Hayes — “it will fail this time.”
There are those who believe, however, that bitcoin has not yet left its traditional cycles behind.
According to Arthur Hayes, traditional bitcoin (BTC) cycles, in which bull and bear markets are experienced every four years, are dead. For this financial analyst and founder of the BitMEX exchange, that pattern will fail this time due to macroeconomic factors.
For Hayes, in the current scenario those responsible for monetary policy in the United States and China are determined to make a massive liquidity injection into the economy in the months to come. A situation that will benefit bitcoin, and prevent the 4-year cycle from happening this time.
The bitcoin market is linked to halving cycles, which is the event that—as explained in Criptopedia, the educational section of CriptoNoticias—halves the reward for mining Bitcoin. Every time this has happened in the past, the price of the asset has risen steadily before the start of the bearish phase. It happened in 2013, then in 2017 and then in 2021, with a delay of 16 months, on average, as seen in the following graph:
It was in April 2024 when the most recent halving occurred, that is, more than 500 days ago. This means that, based on history, the market approaching cycle ceiling and, consequently, to a bearish stage. This is what analyst Henrik Zeberg, for example, believes.
Hayes states that, based on this historical behavior, Traders “want to predict the end of this bull run.” «They apply this rule without understanding why it worked in the past. And without this historical understanding, they do not understand why it will fail this time,” argues the specialist.
Listen to our monetary masters in Washington and Beijing. They clearly state that money will be cheaper and more plentiful. Therefore, bitcoin continues to rise in anticipation of this highly probable future.
Arthur Hayes, co-founder of BitMEX.
The analyst comments that monetary policy decisions of former US President Joe Biden, like the FED’s Reverse Repo Program, “unleashed $2.5 trillion of liquidity in the markets”, a move that was maintained in the current administration of Donald Trump. At the same time, China entered deflation episodes and the government of that country promised to reduce housing prices.
“And without further guidance or changes to the outlook for US and Chinese monetary policy, I would agree with many cryptocurrency traders that the bull run is over. But the recent rhetoric and actions of the FED and the PBOC predict otherwise,” says Hayes, defending his theory that the 4-year cycle is dead.
This is that, in the US, “Trump wants to heat up the economy”, reflected in the first cut in interest rates in a year. In parallel, he believes that money printing will resume from China to combat deflation.
All of this, in Hayes’ calculations, will benefit bitcoin, as it is a massive injection of liquidity that will reach the market. And giving space to another type of behavior directed by macroeconomic trends.