BitMEX co-founder Arthur Hayes claims the long-observed four-year Bitcoin cycle is no longer relevant, attributing Bitcoin’s price movements instead to changes in global monetary policy.
Hayes challenges the four-year cycle
In a recent blog post, Hayes stated that while the four-year pattern has historically worked, it is no longer a reliable guide for predicting Bitcoin bull runs.
He emphasized that previous cycles were not governed by the halving schedule, but rather by the supply and quantity of major global currencies like the US dollar and Chinese yuan.
According to Hayes, cycles have historically ended when monetary conditions tightened, not due to the passage of time or halving events.
Current market conditions differ
Hayes pointed out several factors that make the current cycle distinct.
These include the US Treasury injecting $2.5 trillion into markets, anticipated deregulation to boost bank lending, and the US Federal Reserve resuming rate cuts despite inflation above target.
He also referenced high odds of additional rate cuts later this year, as priced in by futures markets. For a visual on US monetary expansion, see the US M2 money supply vs BTC chart.
US and Chinese policy drive cycles
Hayes explained that past Bitcoin bull runs aligned with periods of aggressive monetary easing in both the US and China.
The first Bitcoin bull run coincided with Federal Reserve quantitative easing and Chinese credit expansion, while subsequent cycles were similarly shaped by liquidity from these two economies.
Hayes explained:
“Listen to our monetary masters in Washington and Beijing. They clearly state that money shall be cheaper and more plentiful. Therefore, Bitcoin continues to rise in anticipation of this highly probable future. The king is dead, long live the king!”
Debate over cycle persistence
Despite Hayes’ analysis, some industry figures and data providers, such as Glassnode, maintain that Bitcoin’s price action still echoes past cyclical patterns.
Gemini’s Saad Ahmed recently stated that some form of market cycle is likely to persist.
