Hayes says Bitcoin cycle no longer guides price as policy drives it

Arthur Hayes, cofounder of the cryptocurrency exchange BitMEX, said in a blog post this week that the long-standing four-year Bitcoin price cycle is no longer a reliable guide for markets. Hayes argues that global monetary policy and liquidity conditions, especially in the United States and China, now determine Bitcoin’s trajectory rather than the halving schedule or fixed calendar patterns. He pointed to recent shifts in U.S. and Chinese policy as factors that could prolong the current rally.

Hayes traced his argument through the asset’s three previous bull-bear cycles, saying each peak coincided with loosening dollar and yuan liquidity and each downturn followed monetary tightening. He cited the first major rally during Federal Reserve quantitative easing and Chinese credit expansion that faded after both authorities slowed money printing in late 2013. He attributed the 2013-17 boom largely to Chinese credit and currency moves and the 2020-21 surge mainly to U.S. liquidity, with that cycle fading after the Fed began tightening in late 2021.

Hayes said the present cycle differs because policymakers are moving in directions that preserve or add liquidity. He noted that the U.S....