Arthur Hayes is the co-founder and CEO of BitMEX. He has confirmed that the crypto-cycle, which lasts four years, does not exist for the same reasons as most people assume.
“As the four-year anniversary of this fourth cycle is upon us, traders wish to apply the historical pattern and forecast an end to this bull run,” Hayes wrote a post in his blog on Thursday.
He said that the old four-year cycle is no longer valid. “will fail this time.”
Hayes Bitcoin is a cryptocurrency (BTCPrice cycles driven by USD and Chinese Yuan supply and volume are more important than four-year patterns. halving eventsAs a result, institutional investors are interested in the crypto market.
Hayes explained that the past cycles were not affected by timing. They ended because of tightening monetary conditions.
Current cycle has a different rhythm
Hayes says the cycle has changed for several reasons. These include the US Treasury losing $2.5 trillion in the Fed’s Reverse Repo by issuing Treasury bills, and the President wanting to change the rules. “run it hot” The following are some examples of how to use easier monetary policy You can get rid of your debt.
Also, there are plans to de-regulate the banks in order to increase lending.
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The US central bank also resumed its rate-cutting despite the fact that inflation was above target. There are two more rate reductions predicted for this year. 94% of the odds predict a cut in October, and 80% on a December one. according CME’s futures markets.
The Chinese and US currency printing
Bitcoin’s bull market began in the wake of Federal Reserve quantitative easement and Chinese credit expansion. It ended when both central banks, Fed and Chinese, slowed down money printing by late 2013.
Second, “ICO cycle” The yuan devaluation and credit boom in 2015 were the primary factors driving the market, not the USD. He said that the bull market crashed as Chinese credit growth slowed and conditions in dollars tightened.
Third “[COVID-19] cycle,” Bitcoin’s growth was largely due to the USD, while China did not participate. Hayes explained that it ended in 2021 when the Fed tightened.
China will not kill off the cycle again
Hayes claimed that while China The policymakers have moved to a different direction. They are not as eager to fuel the rally this time as they were in previous cycles. “end deflation” Rather than continue to drain liquid.
He said that this shift in monetary policy from deflationary to neutral or at least mildly supportive removes an obstacle to the Bitcoin cycle. The US expansion will now be able to push Bitcoin up without Chinese deflation to counteract it.
“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!”
Some still adhere to the 4-year cycle
Glassnode is a company that provides on-chain analysis. stated In August, “from a cyclical perspective, Bitcoin’s price action also echoes prior patterns.”
“I think when it comes to the four-year cycle, the reality is that it’s very likely that we’ll continue to see some form of a cycle,” Saad Ahmed is the head of APAC for Gemini crypto exchange. told Cointelegraph, earlier in the month.
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Source: cointelegraph.com
