Arthur Hayes on Bitcoin’s Future and the End of the Four-Year Cycle
Arthur Hayes, a well-known figure in the crypto space, continues to advocate for the idea that an increased money supply will favor Bitcoin. He also suggests that the typical four-year cycle for major cryptocurrencies might be history.
In a recent blog titled “Long Live the King,” Hayes mentions that while many traders are anticipating Bitcoin to peak soon only to crash next year, he believes this time around will differ from past trends.
Usually, in a Bitcoin cycle, the coin hits a peak the subsequent year. After that, it often sees a drop of 70-80%. Opinions differ this year on the fate of Bitcoin after it potentially reaches a new all-time high in 2024. This year’s situation seems to have diverged from previous patterns.
“As we near the fourth anniversary of Cycle 4, many traders are trying to apply historical trends to forecast the bull market’s end,” says Hayes, the former head of BitMEX.
“They’re using this historical rule without grasping why it worked before,” he adds. “Lacking this understanding could lead them to miss why it might not apply this time.”
Hayes had previously received a pardon from former President Trump. Earlier this year, Trump advocated that the Federal Reserve’s cuts to interest rates, along with China’s decision to not restrict “global fiat credit growth,” would help digital assets, especially after Hayes’s exchange faced issues due to a lack of anti-money laundering measures.
Lower interest rates typically mean more liquidity in the economy. Historically, Bitcoin and other cryptocurrencies tend to perform well under such conditions.
Currently, Trump is urging Fed Chair Jerome Powell to implement rate cuts promptly. He’s putting pressure for this to happen soon, even with inflation still above target.
“In the U.S., President Trump, wanting to boost the economy, talks a lot about growth to help mitigate debt,” Hayes notes. “He criticizes the Fed for being too restrictive with financial supplies. This push seems to be influencing the Fed’s recent decisions, including rate cuts in September despite persistent inflation.”
“Listen to the economic leaders in Washington and Beijing,” Hayes advises. “They’ve clearly indicated that money will become more affordable and plentiful. This is why Bitcoin seems to be rising, anticipating that future.”
Opinions among experts vary regarding Bitcoin’s upcoming prospects. Some analysts from blockchain data firms like Coinglass suggest the highest price for Bitcoin might have been reached already, claiming its current behavior mirrors earlier cycles.
Some experts argue that the approval of a Spot Bitcoin ETF last year might have disrupted the traditional cycle, pushing new highs around the previous halving. There’s a belief that the growing money supply will be beneficial for riskier assets like Bitcoin.
Gabe Selby, from CF Benchmarks, expressed that they view the current cycle as being undervalued by a significant margin compared to the liquidity conditions.
“Despite potential short-term shifts due to Federal Reserve policy changes and fluctuations in the dollar, our model indicates a likelihood of sustained reflation as global monetary support increases, particularly around 2026,” he mentioned.
Meanwhile, Adam McCarthy, a senior analyst at Kaiko, remarked, “Cryptocurrency has only been around for 16 years. It’s hard to make sense of patterns in such a young asset class.”
