Simply put
- Crypto investor Arthur Hayes thinks the established four-year cycle of Bitcoin is over.
- He claims that an increase in the money supply will favor various assets.
- Interestingly, Hayes has previously described his optimistic forecasts as “pretty shitty.”
Arthur Hayes, a prominent figure in the crypto world, maintains that a growing money supply will work in Bitcoin’s favor—he also suggests that the classic four-year cycle for major cryptocurrencies has come to an end.
“Long live the King,” Hayes mentioned in a recent blog post. While some traders foretell Bitcoin will peak soon and then drop next year, Hayes believes this time will be distinct.
Typically, in a Bitcoin cycle, the cryptocurrency hits a peak before experiencing a dramatic decrease of 70-80% in the following year. This year, there’s quite a debate among experts regarding what happens after Bitcoin reaches its all-time high expected in 2024, which, interestingly, has already halved, diverging from past patterns.
“As we near the fourth anniversary of Cycle 4, many traders are trying to use historical precedents to forecast when this bull market might end,” Hayes, former BitMEX CEO, noted.
He added, “They are applying this rule without grasping why it worked before. Without that context, they might miss why it could fail this time.”
Hayes, who received a pardon from former President Donald Trump, mentioned earlier this year that the Federal Reserve’s rate cuts and China’s approach towards global fiat expansion would favor digital assets after his crypto exchange faced issues with anti-money laundering practices.
He pointed out that lower interest rates usually lead to more cash in the economy. Interestingly, cryptocurrencies often perform similarly to stocks in these low-rate situations.
Trump is now urging Federal Reserve Chairman Jerome Powell to speed up interest rate cuts. The first cuts took place back in September, the first in 2025.
“In the U.S., newly elected President Trump aims to stimulate the economy. He often discusses America needing growth to manage its debt,” Hayes observed. “He criticizes the Fed for keeping financial supply too tight, and that pressure is producing results. The Fed resumed rate cuts in September, despite inflation still being above its target.”
“Listen to the financial leaders in Washington and Beijing,” Hayes urged. “They’ve clearly indicated that money will become cheaper and more abundant. Consequently, Bitcoin is likely to increase in anticipation of this promising future.”
Experts are split on what lies ahead for Bitcoin this time around. Some, like the blockchain data firm Coinglass, have suggested the coin may have reached its peak and is mirroring earlier cycles.
However, the approval of a Spot Bitcoin ETF last year could have complicated the conventional cycle, leading to new peaks surrounding past halving events. Some analysts believe that the increased money supply will ultimately benefit riskier assets like Bitcoin.
Gabe Selby, head of research at CF Benchmarks, stated: “We believe the current cycle is undervalued by 20-50% in relation to liquidity conditions.”
“Regardless of short-term volatility connected to shifts in Fed policy and a weaker dollar, our model predicts a lasting reflationary trend as monetary easing accelerates across advanced economies by 2026,” he noted.
Meanwhile, Kaiko’s senior research analyst Adam McCarthy remarked: “Cryptocurrency is just 16 years old. It’s tough to identify patterns in assets that are still relatively young.”
